UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
February 5, 2013
Date of Report
(Date of earliest event reported)
GENWORTH FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-32195 | 33-1073076 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
6620 West Broad Street, Richmond, VA | 23230 | |
(Address of principal executive offices) | (Zip Code) |
(804) 281-6000
(Registrants telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
On February 5, 2013, Genworth Financial, Inc. issued (1) a press release announcing its financial results for the quarter ended December 31, 2012, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference, and (2) a financial supplement for the quarter ended December 31, 2012, a copy of which is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The information contained in this Current Report on Form 8-K (including the exhibits) is being furnished and shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that Section. The information contained in this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01 | Financial Statements and Exhibits. |
The following materials are furnished as exhibits to this Current Report on Form 8-K:
Exhibit Number |
Description of Exhibit | |
99.1 | Press Release dated February 5, 2013. | |
99.2 | Financial Supplement for the quarter ended December 31, 2012. |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GENWORTH FINANCIAL, INC. | ||||||
Date: February 5, 2013 | By: | /s/ Kelly L. Groh | ||||
Kelly L. Groh | ||||||
Vice President and Controller | ||||||
(Principal Accounting Officer) |
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Exhibit Index
Exhibit Number |
Description of Exhibit | |
99.1 | Press Release dated February 5, 2013. | |
99.2 | Financial Supplement for the quarter ended December 31, 2012. |
4
Exhibit 99.1
Genworth Financial Announces Fourth Quarter 2012 Results
Operating Performance Includes Benefit Of $78 Million From New Government Guarantee In Canada
U.S. Mortgage Insurance Recovery Continues
Capital Benefit To U.S. Life Companies Of $175 Million From Second Life Block Transaction
Transfer Of Mortgage Insurance Europe Entities To U.S. Mortgage Insurance Completed
Richmond, VA (February 5, 2013) Genworth Financial, Inc. (NYSE: GNW) today reported results for the fourth quarter of 2012. The company reported net income1 of $166 million, or $0.34 per diluted share, compared with net income of $142 million, or $0.29 per diluted share, in the fourth quarter of 2011. Net operating income2 for the fourth quarter of 2012 was $167 million, or $0.34 per diluted share, compared with net operating income of $124 million, or $0.25 per diluted share, in the fourth quarter of 2011. Current quarter net income and net operating income included a favorable adjustment of $78 million associated with the finalization of the new Government Guarantee framework in Canada.
U.S. mortgage insurance continued its recovery in the fourth quarter, and the company achieved a number of its strategic goals to improve financial flexibility highlighted by the comprehensive U.S. capital plan announced in January, said Tom McInerney, President and CEO. However, results in the U.S. Life Insurance Division were mixed, and I am disappointed in our long term care results. We are focused on executing our plans to rebuild shareholder value.
1 | Unless otherwise stated, all references in this press release to net income, net income per share, net operating income (loss), net operating income per share, book value, book value per share and stockholders equity should be read as net income available to Genworths common stockholders, net income available to Genworths common stockholders per share, net operating income (loss) available to Genworths common stockholders, net operating income available to Genworths common stockholders per share, book value available to Genworths common stockholders, book value available to Genworths common stockholders per share and stockholders equity available to Genworths common stockholders, respectively. |
2 | This is a financial measure not calculated based on U.S. Generally Accepted Accounting Principles (Non-GAAP). See the Use of Non-GAAP Measures section of this press release for additional information. |
1
Consolidated Net Income &
Net Operating Income
Three months ended December 31 (Unaudited) |
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2012 | 2011 | |||||||||||||||
(Amounts in millions, except per share) |
Total | Per diluted share |
Total | Per diluted share |
||||||||||||
Net income |
$ | 166 | $ | 0.34 | $ | 142 | $ | 0.29 | ||||||||
Net operating income |
$ | 167 | $ | 0.34 | $ | 124 | $ | 0.25 | ||||||||
Weighted average diluted shares |
493.9 | 492.7 | ||||||||||||||
Book value per share |
$ | 33.62 | $ | 30.69 | ||||||||||||
Book value per share, excluding accumulated other comprehensive income (loss) |
$ | 23.04 | $ | 22.45 |
Net investment gains, net of tax and other adjustments, were $1 million in the quarter and in the prior year. Total impairments, net of tax, were $14 million in the current quarter and $70 million for the year ended December 31, 2012. In the fourth quarter of 2011, a non-cash impairment charge of $19 million after-tax was recorded in Corporate and Other activities to write-off all of the goodwill associated with the reverse mortgage business.
Beginning in the fourth quarter of 2012, the company changed its financial presentation for divisions to align with the strategy announced in October 2012. The company will continue to operate through three divisions: U.S. Life Insurance, Global Mortgage Insurance and Corporate and Other. Under these divisions, there are six operating business segments. The U.S. Life Insurance Division comprises the U.S. Life Insurance segment, which includes life insurance, long term care insurance (LTC) and fixed annuities. The Global Mortgage Insurance Division includes the International Mortgage Insurance and U.S. Mortgage Insurance segments. The Corporate and Other Division comprises the International Protection segment, which includes the lifestyle protection insurance business, the Wealth Management segment, the Runoff segment, which primarily includes our variable annuity, variable life insurance, institutional, corporate-owned life insurance and Medicare supplement insurance products, and Corporate and Other activities. There were no changes to the financial presentation for the segments.
2
Net operating income (loss) results are summarized in the table below:
Net Operating Income (Loss)
(Amounts in millions) |
Q4 12 | Q3 12 | Q4 11 | |||||||||
U.S. Life Insurance Division: |
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U.S. Life Insurance |
$ | 76 | $ | 86 | $ | 94 | ||||||
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Total U.S. Life Insurance Division |
76 | 86 | 94 | |||||||||
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Global Mortgage Insurance Division: |
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International Mortgage Insurance3 |
165 | 94 | 83 | |||||||||
U.S. Mortgage Insurance (U.S. MI) |
(34 | ) | (38 | ) | (96 | ) | ||||||
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Total Global Mortgage Insurance Division |
131 | 56 | (13 | ) | ||||||||
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Corporate and Other Division: |
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International Protection |
8 | 8 | 19 | |||||||||
Wealth Management |
8 | 10 | 12 | |||||||||
Runoff |
8 | 9 | 15 | |||||||||
Corporate and Other |
(64 | ) | (48 | ) | (3 | ) | ||||||
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Total Corporate and Other Division |
(40 | ) | (21 | ) | 43 | |||||||
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Total Net Operating Income |
167 | 121 | 124 | |||||||||
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Net operating income (loss) excludes net investment gains (losses), goodwill impairments, gains (losses) on the sale of businesses and other adjustments, net of taxes. A reconciliation of net operating income (loss) of segments and Corporate and Other activities to net income (loss) is included at the end of this press release.
Unless specifically noted in the discussion of results for the International Protection and International Mortgage Insurance segments, references to percentage changes exclude the impact of foreign exchange. Percentage changes, which include the impact of foreign exchange, are found in a table at the end of this press release. The impact of foreign exchange on net operating income in the fourth quarter of 2012 was a $4 million favorable impact versus the prior year and a $1 million favorable impact versus the prior quarter.
3 | Fourth quarter of 2012 included a favorable adjustment of $78 million associated with the finalization of the new Government Guarantee framework in Canada. |
3
U.S. Life Insurance Division
U.S. Life Insurance Division net operating income was $76 million, compared with $86 million in the prior quarter and $94 million a year ago.
U.S. Life Insurance Division
Net Operating Income
(Amounts in millions) |
Q4 12 | Q3 12 | Q4 11 | |||||||||
U.S. Life Insurance |
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Life Insurance |
$ | 49 | $ | 22 | $ | 48 | ||||||
Long Term Care |
7 | 45 | 28 | |||||||||
Fixed Annuities |
20 | 19 | 18 | |||||||||
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Total U.S. Life Insurance |
76 | 86 | 94 | |||||||||
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Total U.S. Life Insurance |
$ | 76 | $ | 86 | $ | 94 | ||||||
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Sales4
(Amounts in millions) |
Q4 12 | Q3 12 | Q4 11 | |||||||||
U.S. Life Insurance |
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Life Insurance |
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Term Life |
$ | | $ | 1 | $ | | ||||||
Term Universal Life |
11 | 19 | 31 | |||||||||
Universal Life |
17 | 15 | 16 | |||||||||
Linked Benefits |
3 | 3 | 2 | |||||||||
Long Term Care |
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Individual |
60 | 63 | 56 | |||||||||
Group |
4 | 6 | 9 | |||||||||
Fixed Annuities |
248 | 487 | 363 |
Account Value
(Amounts in millions) |
Q4 12 | Q3 12 | Q4 11 | |||||||||
Fixed Annuities |
$ | 18,581 | $ | 18,677 | $ | 18,371 |
U.S. Life Insurance Division
Highlights
| U.S. Life Insurance Division net operating income was $76 million, compared with $86 million in the prior quarter and $94 million a year ago. |
| On October 22, 2012, the company announced changes to its life insurance portfolio designed to update and expand its product offerings and further adjust pricing to reflect the current low interest rate market environment and recent regulatory changes affecting reserve requirements. The company launched a new traditional term insurance product during the quarter which replaced Colony Term Universal Life. In addition, the company simplified its guaranteed universal life insurance portfolio and repriced GenGuard UL. |
4 | In the first quarter of 2012, the company changed its presentation for life insurance sales to a premium equivalent basis. The prior period amounts have been re-presented to reflect sales for term universal and universal life insurance products as annualized first-year deposits plus five percent of excess deposits and 10 percent of premium deposits for linked-benefits products. |
4
| The consolidated risk-based capital (RBC) ratio is estimated to be approximately 430 percent5, up from 420 percent at the end of the third quarter of 2012 from the impact of the companys second life block transaction, partially offset by an extraordinary cash dividend of $25 million which was paid to the holding company, bringing the year-to-date dividends from the proceeds from the sale of the Medicare supplement business in 2011 to $175 million. |
| The company completed its second life block transaction in the fourth quarter of 2012. The transaction generated approximately $175 million in initial after-tax capital benefits for the U.S. life insurance companies in the fourth quarter of 2012. The prior quarter included a GAAP net loss of $6 million related to this transaction, with no impact in the quarter. |
Life Insurance
Life insurance net operating income was $49 million, compared with $22 million in the prior quarter and $48 million in the prior year. Results in the quarter included favorable mortality of $14 million versus the prior quarter driven by lower claim frequency and severity partially offset by lower in force margins. Mortality was also $8 million more favorable than the prior year from lower claim frequency and from the impacts of a smaller in force block. Lower term universal life new business expenses contributed $4 million of additional earnings compared with the prior year. Results in the current quarter also included a $3 million after-tax gain related to selective repurchases of notes secured by non-recourse funding obligations. Results in the prior quarter included a $9 million unfavorable impact from the unlocking of interest assumptions impacting reserves and deferred acquisition costs (DAC) and a $6 million unfavorable impact from the companys second life block transaction. Results in the prior year included a $10 million favorable impact from reserve refinements from a system conversion and a $4 million after-tax gain related to selective repurchases of notes secured by non-recourse funding obligations. Sales were down $7 million versus the prior quarter and $18 million versus the prior year reflecting the product changes made in October 2012. The company expects further moderation of life insurance sales in the first half of 2013, consistent with its capital management and product portfolio plans.
Long Term Care Insurance
Long term care insurance net operating income was $7 million, compared with $45 million in the prior quarter and $28 million in the prior year. The current quarter included a $5 million unfavorable refinement to reserves to more fully reflect the low interest rate environment. The prior quarter included $29 million of favorable reserve adjustments primarily from the continuation of a multi-stage system conversion. A higher average reserve build on new claims reduced earnings by $5 million versus the prior quarter and $8 million versus the prior year. The prior year also included $6 million of favorable reserve adjustments from higher active policy terminations. The reported loss ratio for the quarter was 76 percent.
5 | Company estimate for the fourth quarter of 2012, due to timing of the filing of statutory statements. |
5
Individual long term care sales decreased slightly from the prior quarter to $60 million, but remain elevated reflecting accelerated sales in advance of previously announced pricing and portfolio actions. The company expects sales levels to decline in the first quarter of 2013 as the accelerated sales from the previously announced pricing and portfolio actions should subside. The company continues to utilize reinsurance in long term care insurance as part of its capital optimization strategies.
In the third quarter of 2012, the company began to request another round of long term care in force premium rate increases with the goal of achieving an average premium increase in excess of 50 percent on the older generation policies and an average premium increase in excess of 25 percent on an earlier series of new generation policies over the next five years. The premium rate increases are designed to mitigate losses on the older generation policies. Although the earlier series of the newer generation policies have generated positive operating earnings to date, the rate increase on these policies will help offset lower than priced-for returns due to lower interest rates, unfavorable business mix and lower lapse rates than expected. Subject to regulatory approval, this premium rate increase would generate approximately $200 to $300 million of additional annual premiums when fully implemented. As of December 31, 2012, this round of rate action has been filed in 49 states and has approvals representing approximately 20 percent of the targeted premium increase.
In July 2012, the company began filing a new product scheduled for release in the second quarter of 2013, which will include underwriting improvements such as gender distinct pricing for single applicants and blood and lab underwriting requirements for all applicants. As of December 31, 2012, the new product has been filed in 49 states and has received approval from 34 states.
Fixed Annuities
Fixed annuities net operating income was $20 million, compared with $19 million in the prior quarter and $18 million in the prior year. The results in the prior year included a $4 million unfavorable impact related to accruals for state guarantee fund assessments. Sales in the quarter totaled $248 million and were down both sequentially and from the prior year as the company continues to maintain margins in the low interest rate environment.
6
Global Mortgage Insurance Division
Global Mortgage Insurance Division had net operating income of $131 million, compared with net operating income of $56 million in the prior quarter and a net operating loss of $13 million a year ago. In the fourth quarter of 2012, regulations were finalized with regard to the new Government Guarantee framework in Canada that went into effect January 1, 2013. As a result, exit fee obligations under the existing Government Guarantee Agreement were terminated. Results in the quarter include a $78 million after-tax favorable adjustment from the reversal of the accrued liability for exit fees associated with the change to the Government Guarantee Agreement.
Global Mortgage Insurance Division
Net Operating Income (Loss)
(Amounts in millions) |
Q4 12 | Q3 12 | Q4 11 | |||||||||
International Mortgage Insurance |
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Canada3 |
$ | 114 | $ | 42 | $ | 40 | ||||||
Australia |
62 | 57 | 54 | |||||||||
Other Countries |
(11 | ) | (5 | ) | (11 | ) | ||||||
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Total International Mortgage Insurance |
165 | 94 | 83 | |||||||||
U.S. Mortgage Insurance |
(34 | ) | (38 | ) | (96 | ) | ||||||
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Total Global Mortgage Insurance |
$ | 131 | $ | 56 | $ | (13 | ) | |||||
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Sales
(Amounts in billions) |
Q4 12 | Q3 12 | Q4 11 | |||||||||
International Mortgage Insurance |
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Flow |
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Canada |
$ | 4.4 | $ | 7.2 | $ | 5.2 | ||||||
Australia |
9.6 | 8.8 | 7.9 | |||||||||
Other Countries |
0.5 | 0.4 | 0.4 | |||||||||
Bulk |
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Canada |
4.1 | 2.6 | 1.0 | |||||||||
Australia |
| | 1.1 | |||||||||
Other Countries |
| | 0.3 | |||||||||
U.S. Mortgage Insurance |
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Primary Flow |
5.1 | 4.7 | 3.2 | |||||||||
Primary Bulk |
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7
International Mortgage Insurance Segment
Highlights
| Reported International Mortgage Insurance segment operating earnings were $165 million, including a favorable adjustment of $78 million associated with the finalization of the new Government Guarantee framework in Canada, compared with $94 million in the prior quarter and $83 million a year ago. |
| Canada operating earnings of $114 million were up from $42 million in the prior quarter and $40 million in the prior year. The loss ratio was 31 percent, up one point sequentially and down nine points year over year. Results in the quarter also included unfavorable taxes of $3 million. |
| Australia operating earnings of $62 million were up from $57 million in the prior quarter and $54 million in the prior year. The loss ratio in the current quarter was 36 percent, down 11 points sequentially and down 10 points year over year. |
| Other Countries had a net operating loss of $11 million, compared to a net operating loss of $5 million in the prior quarter and a net operating loss of $11 million in the prior year. |
| In Canada, flow new insurance written (NIW) was down 40 percent6 sequentially and down 17 percent6 year over year from changes to the rules governing the issuance of high loan-to-value residential mortgages made in July 2012 and normal seasonal variation. In addition, the company completed several bulk transactions, consisting of low loan-to-value prime loans, of approximately $4.1 billion reflecting its selective participation in this market. |
| In Australia, flow NIW was up eight percent6 sequentially and up 19 percent6 year over year as the current year origination market was larger primarily from improved affordability from lower mortgage rates. |
| The Canadian and Australian businesses continue to maintain sound capital positions. |
| Dividends of $121 million were paid to the holding company through December 31, 2012. |
Canada Mortgage Insurance
Canada operating earnings of $114 million were up from $42 million in the prior quarter and $40 million in the prior year. Results in the quarter included a $78 million favorable adjustment from the reversal of the accrued liability for exit fees related to the modification of the Government Guarantee Agreement in addition to $3 million of unfavorable taxes. The loss ratio in the quarter was 31 percent, up from 30 percent in the prior quarter reflecting seasonal variation and down from 40 percent in the prior year from lower new delinquencies, net of cures, and continued improvement in Alberta. Total delinquencies were down one percent sequentially from the maturing of the larger 2007 and 2008 books of business. Flow NIW was down 40 percent6 sequentially and down 17 percent6 year over year from changes to the rules governing the issuance of high loan-to-value residential mortgages made in July 2012 and normal seasonal variation. In addition, the company completed several bulk transactions, consisting of low loan-to-value prime loans, of approximately $4.1 billion reflecting its selective participation in this market. At quarter end, the Canada mortgage insurance business had a regulatory capital ratio of approximately 170 percent5, well in excess of regulatory requirements. GAAP book value was $3.0 billion, of which $1.7 billion represented Genworths 57.5 percent ownership interest.
6 | Percent change excludes the impact of foreign exchange. |
8
Australia Mortgage Insurance
Australia reported net operating earnings of $62 million versus reported operating earnings of $57 million in the prior quarter and $54 million in the prior year as claims development in the quarter was in line with the first quarter reserve strengthening expectations. The loss ratio in the quarter was 36 percent, down 11 points sequentially and 10 points from the prior year. Overall, delinquencies were down 14 percent from the prior quarter and new delinquencies were lower in all major states. Flow NIW was up eight percent6 sequentially and up 19 percent6 year over year as the current year origination market was larger primarily from improved affordability from lower mortgage rates. At quarter end, the Australia mortgage insurance business had a regulatory capital ratio of approximately 149 percent5, as the business continued to expand its reinsurance program as part of risk and capital management strategies. The GAAP book value was $2.3 billion as of the end of the quarter.
Other Countries Mortgage Insurance
Other Countries had a net operating loss of $11 million from increased losses in the current quarter primarily in Ireland, compared to a net operating loss of $5 million in the prior quarter and a net operating loss of $11 million in the prior year.
U.S. Mortgage Insurance Segment
Highlights
| U.S. MI net operating loss was $34 million, compared with net operating losses of $38 million in the prior quarter and $96 million in the prior year. Results in the quarter included $8 million of favorable taxes versus the prior quarter and $10 million versus the prior year primarily from state tax effective rate changes. |
| Total flow delinquencies of 66,340 decreased four percent sequentially and 21 percent from the prior year. New flow delinquencies decreased approximately four percent from the prior quarter and decreased approximately 23 percent from the prior year. New delinquencies decreased approximately 23 percent for the year ended December 31, 2012 compared to the prior year. |
| Loss mitigation savings were $165 million in the current quarter and $674 million for the year ended December 31, 2012, exceeding the previously announced full year loss mitigation savings target of $300 to $400 million. |
| Flow NIW increased nine percent over the prior quarter and 59 percent over the prior year to $5.1 billion reflecting an increase in both refinance and purchase private mortgage insurance penetration, a larger origination market and stable market share. |
| The combined risk-to-capital ratio as of December 31, 2012 is estimated at 30.4:15. |
| On January 16, 2013, the company announced a comprehensive U.S. MI capital plan. |
9
U.S. MI net operating loss was $34 million, compared with net operating losses of $38 million in the prior quarter and $96 million in the prior year.
Total flow delinquencies decreased four percent sequentially and 21 percent versus the prior year. New flow delinquencies decreased approximately four percent from the prior quarter and decreased approximately 23 percent from the prior year, reflecting the continued burn through of delinquencies from the 2005 to 2008 book years. The flow average reserve per delinquency was $29,700, down slightly from the prior quarter.
Total losses were up slightly compared to the prior quarter as an expected reduction in loss mitigation savings and modest changes in aging was partially offset by lower new delinquency development with a favorable mix. Paid claims increased 14 percent from the prior year, driven by higher claim counts and a reduction in captive benefits, partially offset by a reduction in severity from claims mitigation.
Loss mitigation savings were $165 million in the quarter, down 13 percent from the prior quarter, from an expected reduction in overall workouts and reduced claims mitigation savings.
Flow NIW increased nine percent over the prior quarter and 59 percent versus the prior year to $5.1 billion reflecting an increase in both refinance and purchase private mortgage insurance penetration, a larger origination market and stable market share. Overall private mortgage insurance market penetration was flat to the prior quarter and up approximately three points year over year. The companys market share at the end of the quarter is estimated to be 13 percent. Flow persistency was 79 percent. In addition, the Home Affordable Refinance Program (HARP) accounted for about $2.4 billion in the quarter and $8.4 billion for the full year of insurance that is treated as a modification of the coverage on existing insurance in force rather than NIW.
The combined U.S. MI statutory risk-to-capital ratio is estimated at 30.4:15 at the end of the fourth quarter with the risk-to-capital ratio for Genworth Mortgage Insurance Corporation (GMICO) estimated at 36.9:15. GMICO currently maintains waivers or other authorizations from 45 states that permit the company to continue writing new business while its risk-to-capital ratio exceeds 25.0:1. Additionally, the company has separately capitalized and licensed legal entities to write new business for states where waivers are not in place, subject to the approval of applicable regulators and the GSEs (government sponsored entities) approval. Currently, new business in four states is being written out of Genworth Residential Mortgage Assurance Corporation (GRMAC), a subsidiary of GMICO.
On January 16, 2013, the company announced a comprehensive U.S. MI capital plan that, when implemented, will reduce GMICOs risk-to-capital by 12 to 15 points, decrease the likelihood that the U.S. mortgage insurance subsidiaries will require additional capital for the foreseeable future, ensure the continued ability to
10
write new business and reduce the risk of a default under the indenture governing Genworths senior notes through an internal legal entity reorganization. The company expects to complete this transaction in the second quarter of 2013, subject to regulatory approval. As part of this capital plan, effective January 31, 2013, the company completed the transfer of ownership of the European mortgage insurance subsidiaries to GMICO. The effect of this transfer will increase GMICOs statutory capital by approximately $230 million. The transfer would have resulted in a favorable impact to GMICOs risk-to-capital ratio of approximately 12 points as of December 31, 2012.
Corporate and Other Division
Corporate and Other Division net operating loss was $40 million, compared with $21 million in the prior quarter and net operating income of $43 million in the prior year.
Corporate and Other Division
Net Operating Income (Loss)
(Amounts in millions) |
Q4 12 | Q3 12 | Q4 11 | |||||||||
International Protection |
$ | 8 | $ | 8 | $ | 19 | ||||||
Wealth Management |
8 | 10 | 12 | |||||||||
Runoff |
8 | 9 | 15 | |||||||||
Corporate and Other |
(64 | ) | (48 | ) | (3 | ) | ||||||
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Total Corporate and Other |
$ | (40 | ) | $ | (21 | ) | $ | 43 | ||||
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Assets Under Management7
(Amounts in millions) |
Q4 12 | Q3 12 | Q4 11 | |||||||||
Wealth Management |
$ | 22,349 | $ | 22,633 | $ | 25,087 | ||||||
Variable Annuities |
8,095 | 8,270 | 8,315 | |||||||||
Guaranteed Investment Contracts, Funding Agreements Backing Notes and Funding Agreements |
2,153 | 2,297 | 2,623 |
International Protection Segment
International Protection operating earnings of $8 million were flat sequentially and down from $19 million in the prior year. The reported loss ratio increased five points from the prior quarter to 23 percent as new claim registrations were up 11 percent. The reported loss ratio also increased seven points from the prior year as higher claim severity primarily in Southern Europe was partially offset by lower new claim registrations. The underwriting margin8 decreased two points from the prior quarter and four points from the prior year to 17 percent from higher losses. Operating expenses decreased $6 million after-tax versus the prior year and were flat to the prior quarter. In light of the continued slow consumer lending environment in Europe, additional
7 | Assets under management represent account values, net of reinsurance, and managed third-party assets. |
8 | See Definition of Selected Operating Performance Measures for definition of underwriting margin. |
11
actions have been taken to reduce expenses and mitigate these impacts. Sales decreased one percent6 versus the prior quarter and three percent6 versus the prior year. At quarter end, the lifestyle protection business had a regulatory capital ratio of approximately 321 percent5. During the quarter, the business paid a $63 million dividend to the holding company bringing total dividends paid to the holding company through December 31, 2012 to $119 million.
Wealth Management Segment
Wealth Management net operating income was $8 million, compared with $10 million in the prior quarter and $12 million in the prior year. Net operating income in the prior year included approximately $2 million for Genworth Financial Investment Services (GFIS), which was sold on April 2, 2012. Assets under management (AUM) decreased sequentially to $22.3 billion as negative net flows of $373 million, primarily related to relative investment performance, were partially offset by positive market conditions impacting AUM by $89 million. On January 31, 2013, Genworth Wealth Management launched GPS Select Solutions, a suite of new multi-strategist solutions to help grow or preserve wealth, generate income, or serve a variety of other specific investment goals. Margins9 as a percentage of average AUM decreased 18 percent from the prior year. As of the end of the quarter, total advisors with assets on the platform were approximately 6,240. During the quarter, the business paid a $9 million dividend to the holding company bringing total dividends paid to the holding company through December 31, 2012 to $39 million.
Runoff Segment
The Runoff segments net operating income was $8 million, compared with $9 million in the prior quarter and $15 million in the prior year. Results in the current quarter reflected more favorable taxes versus the prior year. Results in the prior quarter and prior year benefitted from more favorable equity market conditions. Results in the prior quarter also included a $6 million unfavorable impact from refinement of DAC assumptions primarily related to the companys annual review of assumptions.
Corporate and Other
Corporate and Others net operating loss was $64 million, compared with $48 million in the prior quarter and $3 million in the prior year. Results in the current quarter reflected $13 million of higher taxes primarily from a reversal of tax benefits in the prior quarter and higher expenses associated with the debt tender that was completed in the quarter. Results in the prior year reflected favorable taxes. On a pre-tax operating basis, the loss increased 11 percent year over year from the higher debt tender expenses in the quarter.
9 | Calculated as pre-tax income as a percentage of average AUM annualized to determine the current full year impact, excluding the impacts of GFIS. Average AUM for December 31, 2011 excludes $2.6 billion related to GFIS. Pre-tax income for December 31, 2011 excludes $2 million related to GFIS. |
12
Investment Portfolio Performance
Investment income increased, with net investment income of $840 million, compared to $825 million in the third quarter. The core yield2 increased slightly to approximately 4.6 percent from approximately 4.5 percent in the prior quarter from more favorable limited partnership performance.
Net income in the quarter included $1 million of net investment gains, net of tax and DAC amortization of $7 million. Total impairments, net of tax, were $14 million in the current quarter and $70 million for the year ended December 31, 2012.
Net unrealized investment gains were $2.6 billion, net of tax and other items, as of December 31, 2012, compared with $1.5 billion as of December 31, 2011 and $2.6 billion as of September 30, 2012. The fixed maturity securities portfolio had gross unrealized investment gains of $6.7 billion compared with $5.1 billion as of December 31, 2011 and gross unrealized investment losses of $0.6 billion compared with $1.4 billion as of December 31, 2011.
Holding Company
Genworths holding company ended the quarter with approximately $1.0 billion of cash and highly liquid securities, down approximately $360 million sequentially primarily from approximately $345 million in payments made to the operating companies related to tax sharing agreements and $208 million of debt interest payments and debt repurchase partially offset by $191 million of dividends received from the operating companies. The holding company targets maintaining cash balances of at least two times its annual debt service expense. The holding company has no debt maturities until June 2014.
13
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company dedicated to helping people secure their financial lives, families and futures. Genworth has leadership positions in offerings that assist consumers in protecting themselves, investing for the future and planning for retirement including life insurance, long term care insurance, financial protection coverages, and independent advisor-based wealth management and mortgage insurance that helps consumers achieve home ownership while assisting lenders in managing their risk and capital.
Genworth has approximately 6,300 employees and operates through three divisions: U.S. Life Insurance, comprised of the U.S. Life Insurance segment, which includes life insurance, long term care insurance (LTC) and fixed annuities; Global Mortgage Insurance, containing U.S. Mortgage Insurance and International Mortgage Insurance segments; and the Corporate and Other division, which includes the International Protection, Wealth Management and Runoff segments. Its products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists. Genworth Financial, Inc., headquartered in Richmond, Virginia, traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com. From time to time, Genworth Financial, Inc. releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the Investors section of genworth.com.
Conference Call and Financial Supplement Information
This press release and the fourth quarter 2012 financial supplement are now posted on the companys website. Additional information regarding financial results, Australia mortgage insurance and U.S. mortgage insurance are also posted on the companys website, http://investor.genworth.com. Investors are encouraged to review all of these materials.
Genworth will conduct a conference call on February 6, 2013 at 9 a.m. (ET) to discuss the quarters results and provide an update on the companys strategy and 2013 goals. Additional materials relating to the 2013 business goals will be available at 8 a.m. (ET) on February 6, 2013. The conference call will be accessible via telephone and the Internet. The dial-in number for the conference call is 866 393.0571 or 206 453.2872 (outside the U.S.). To participate in the call by webcast, register at http://investor.genworth.com at least 15 minutes prior to the webcast to download and install any necessary software.
Replays of the call will be available through February 20, 2013 at 855 859.2056 or 404 537.3406 (outside the U.S.); the conference ID # for the call is # 83049389. The webcast will also be archived on the companys website.
14
Use of Non-GAAP Measures
This press release includes the non-GAAP financial measure entitled net operating income (loss). The chief operating decision maker evaluates segment performance and allocates resources on the basis of net operating income (loss) available to Genworth Financial, Inc.s common stockholders. The company defines net operating income (loss) available to Genworth Financial, Inc.s common stockholders as income (loss) from continuing operations excluding the after-tax effects of income attributable to noncontrolling interests, net investment gains (losses), goodwill impairments, gains (losses) on the sale of businesses and other infrequent or unusual non-operating items. The company excludes net investment gains (losses) and infrequent or unusual non-operating items because the company does not consider them to be related to the operating performance of the companys segments and Corporate and Other activities. A component of the companys net investment gains (losses) is the result of impairments, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to the companys discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Goodwill impairments and gains (losses) on the sale of businesses are also excluded from net operating income (loss) available to Genworth Financial, Inc.s common stockholders because, in the companys opinion, they are not indicative of overall operating trends. Other non-operating items are also excluded from net operating income (loss) available to Genworth Financial, Inc.s common stockholders if, in the companys opinion, they are not indicative of overall operating trends.
In the third quarter of 2012, management revised the definition of net operating income (loss) available to Genworth Financial, Inc.s common stockholders to exclude goodwill impairments to better reflect the basis on which the performance of its business is internally assessed and to reflect managements opinion that it is not indicative of overall operating trends. The company also modified its definition to explicitly state that gains (losses) on the sale of businesses, which were previously included in the infrequent and unusual category, are excluded from net operating income (loss). All prior periods presented have been re-presented to reflect this new definition.
While some of these items may be significant components of net income (loss) available to Genworth Financial, Inc.s common stockholders in accordance with GAAP, the company believes that net operating income (loss) available to Genworth Financial, Inc.s common stockholders and measures that are derived from or incorporate net operating income (loss) available to Genworth Financial, Inc.s common stockholders, including net operating income (loss) available to Genworth Financial, Inc.s common stockholders per common share on a basic and diluted basis, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses net operating income (loss) available to Genworth Financial, Inc.s common stockholders as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. However, the items excluded from net operating income (loss) available
15
to Genworth Financial, Inc.s common stockholders have occurred in the past and could, and in some cases will, recur in the future. Net operating income (loss) available to Genworth Financial, Inc.s common stockholders and net operating income (loss) available to Genworth Financial, Inc.s common stockholders per common share on a basic and diluted basis are not substitutes for net income (loss) available to Genworth Financial, Inc.s common stockholders or net income (loss) available to Genworth Financial, Inc.s common stockholders per common share on a basic and diluted basis determined in accordance with GAAP. In addition, the companys definition of net operating income (loss) available to Genworth Financial, Inc.s common stockholders may differ from the definitions used by other companies. There were no infrequent or unusual non-operating items excluded from net operating income available to Genworth Financial, Inc.s common stockholders during the periods presented other than a $19 million after-tax goodwill impairment related to the reverse mortgage business and a $36 million gain related to the sale of the Medicare supplement insurance business recorded in the fourth quarter of 2011. The tables at the end of this press release reflect net operating income (loss) as determined in accordance with accounting guidance related to segment reporting and a reconciliation of net operating income (loss) of the companys segments and Corporate and Other activities to net income available to Genworth Financial, Inc.s common stockholders for the three and twelve months ended December 31, 2012 and 2011.
This press release includes the non-GAAP financial measure entitled core yield as a measure of investment yield. The company defines core yield as the investment yield adjusted for those items that are not recurring in nature. Management believes that analysis of core yield enhances understanding of the investment yield of the company. However, core yield as defined by the company should not be viewed as a substitute for GAAP investment yield. In addition, the companys definition of core yield may differ from the definitions used by other companies. A reconciliation of core yield to reported GAAP yield is included in a table at the end of this press release.
Definition of Selected Operating Performance Measures
The company reports selected operating performance measures including sales, assets under management and insurance in force or risk in force which are commonly used in the insurance and investment industries as measures of operating performance.
Management regularly monitors and reports sales metrics as a measure of volume of new and renewal business generated in a period. Sales refer to: (1) annualized first-year premiums for term life and long term care insurance; (2) annualized first-year deposits plus five percent of excess deposits for universal and term universal life insurance products; (3) 10 percent of premium deposits for linked-benefits products; (4) new and additional premiums/deposits for fixed annuities; (5) new insurance written for mortgage insurance; (6) written premiums and deposits, gross of ceded reinsurance and cancellations, and premium equivalents, where the company earns a fee for administrative services only business, for the lifestyle protection insurance business;
16
and (7) gross flows and net flows, which represent gross flows less redemptions, for the wealth management business. Sales do not include renewal premiums on policies or contracts written during prior periods. The company considers annualized first-year premiums, premium equivalents, new premiums/deposits, gross and net flows, written premiums and new insurance written to be a measure of the companys operating performance because they represent a measure of new sales of insurance policies or contracts during a specified period, rather than a measure of the companys revenues or profitability during that period.
This press release also includes information related to loss mitigation activities for the U.S. mortgage insurance business. The company defines loss mitigation activities as rescissions, cancellations, borrower loan modifications, repayment plans, lender- and borrower-titled presales, claims administration and other loan workouts. Estimated savings related to rescissions are the reduction in carried loss reserves, net of premium refunds and reinstatement of prior rescissions. Estimated savings related to loan modifications and other cure related loss mitigation actions represent the reduction in carried loss reserves. For non-cure related actions, including presales, the estimated savings represent the difference between the full claim obligation and the actual amount paid. The company believes that this information helps to enhance the understanding of the operating performance of the U.S. mortgage insurance business as loss mitigation activities specifically impact current and future loss reserves and level of claim payments.
This press release also includes the metric entitled underwriting margin related to the lifestyle protection business. The company defines underwriting margin as underwriting profit divided by net earned premiums. Underwriting profit is defined as premiums less benefits and other changes in reserves, commissions (which include amortization of deferred acquisition costs) and profit share expenses. Management believes that this analysis of underwriting margin enhances the understanding of the lifestyle protection business.
Management regularly monitors and reports assets under management for the wealth management business, insurance in force and risk in force. Assets under management for the wealth management business represent third-party assets under management that are not consolidated in the companys financial statements. Insurance in force for the life, international mortgage and U.S. mortgage insurance businesses is a measure of the aggregate face value of outstanding insurance policies as of the respective reporting date. For the risk in force in the international mortgage insurance business, the company has computed an effective risk in force amount, which recognizes that the loss on any particular loan will be reduced by the net proceeds received upon sale of the property. Effective risk in force has been calculated by applying to insurance in force a factor of 35 percent that represents the highest expected average per-claim payment for any one underwriting year over the life of the companys businesses in Canada and Australia. Risk in force for the U.S. mortgage insurance business is the obligation that is limited under contractual terms to the amounts less than 100 percent of the mortgage loan value. The company considers assets under management for the wealth management business, insurance in force and risk in force to be a measure of the companys operating
17
performance because they represent a measure of the size of the business at a specific date which will generate revenues and profits in a future period, rather than a measure of the companys revenues or profitability during that period.
These operating measures enable the company to compare its operating performance across periods without regard to revenues or profitability related to policies or contracts sold in prior periods or from investments or other sources.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as expects, intends, anticipates, plans, believes, seeks, estimates, will or words of similar meaning and include, but are not limited to, statements regarding the outlook for the companys future business and financial performance. Forward-looking statements are based on managements current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks, including the following:
| Risks relating to the companys businesses, including downturns and volatility in global economies and equity and credit markets; downgrades or potential downgrades in the companys financial strength or credit ratings; interest rate fluctuations and levels; adverse capital and credit market conditions; the impact of expiration of the companys credit facilities; the valuation of fixed maturity, equity and trading securities; defaults, downgrades or other events impacting the value of the companys fixed maturity securities portfolio; defaults on the companys commercial mortgage loans or the mortgage loans underlying the companys investments in commercial mortgage-backed securities and volatility in performance; goodwill impairments; defaults by counterparties to reinsurance arrangements or derivative instruments; an adverse change in risk based capital and other regulatory requirements; insufficiency of reserves; legal constraints on dividend distributions by the companys subsidiaries; competition; availability, affordability and adequacy of reinsurance; loss of key distribution partners; regulatory restrictions on the companys operations and changes in applicable laws and regulations; legal or regulatory investigations or actions; the failure of or any compromise of the security of the companys computer systems; the occurrence of natural or man-made disasters or a pandemic; the effect of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act; changes in the accounting standards issued by the Financial Accounting Standards Board or other standard-setting bodies; impairments of or valuation allowances against the companys deferred tax assets; changes in expected morbidity and mortality rate; accelerated amortization of deferred acquisition costs and present value of future profits; reputational risks as a result of rate increases on certain in force long term care insurance products; medical advances, such as genetic research and diagnostic |
18
imaging, and related legislation; unexpected changes in persistency rates; ability to continue to implement actions to mitigate the impact of statutory reserve requirements; the failure of demand for long term care insurance to increase; political and economic instability or changes in government policies; foreign exchange rate fluctuations; unexpected changes in unemployment rates; unexpected increases in mortgage insurance default rates or severity of defaults; the significant portion of high loan to value insured international mortgage loans which generally result in more and larger claims than lower loan-to-value ratios; competition with government owned and government sponsored enterprises offering mortgage insurance; changes in international regulations reducing demand for mortgage insurance; increases in mortgage insurance default rates; failure to meet, or have waived to the extent needed, the minimum statutory capital requirements and hazardous financial condition standards; uncertain results of continued investigations of insured U.S. mortgage loans; possible rescissions of coverage and the results of objections to the companys rescissions; the extent to which loan modifications and other similar programs may provide benefits to the company; unexpected changes in unemployment and underemployment rates in the United States; further deterioration in economic conditions or a further decline in home prices in the United States; problems associated with foreclosure process defects in the United States that may defer claim payments; changes to the role or structure of Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac); competition with government owned and government sponsored enterprises offering U.S. mortgage insurance; changes in regulations that affect the U.S. mortgage insurance business; the influence of Fannie Mae, Freddie Mac and a small number of large mortgage lenders and investors; decreases in the volume of high loan to value mortgage originations or increases in mortgage insurance cancellations in the United States; increases in the use of alternatives to private mortgage insurance in the United States and reductions by lenders in the level of coverage they select; the impact of the use of reinsurance with reinsurance companies affiliated with U.S. mortgage lending customers; legal actions under the Real Estate Settlement Procedures Act of 1974; and potential liabilities in connection with the companys U.S. contract underwriting services; |
| Other risks, including the risk of failure to complete the implementation of the capital plan (including the reorganization) in a timely manner or at all for any reason (including failure to obtain required insurance regulator and other approvals or relief), failure to achieve the anticipated benefits of the capital plan, and unanticipated complexities or costs in implementing the capital plan; adverse market or other conditions might further delay or impede the planned IPO of the companys mortgage insurance business in Australia; the possibility that in certain circumstances the company will be obligated to make payments to General Electric Company (GE) under the tax matters agreement with GE even if the companys corresponding tax savings are never realized and payments could be accelerated in the event of certain changes in control; and provisions of the companys certificate of incorporation and bylaws and the tax matters agreement with GE may discourage takeover attempts and business combinations that stockholders might consider in their best interests; and |
| Risks relating to the companys common stock, including the suspension of dividends and stock price fluctuations. |
19
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
# # #
Contact Information:
Investors: | Georgette Nicholas, 804 662.2248 | |
georgette.nicholas@genworth.com | ||
Media: | Al Orendorff, 804 662.2534 | |
alfred.orendorff@genworth.com |
20
Condensed Consolidated Statements of Income
(Amounts in millions, except per share amounts)
Three months ended December 31, |
Twelve months ended December 31, |
|||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenues: |
||||||||||||||||
Premiums |
$ | 1,318 | $ | 1,352 | $ | 5,038 | $ | 5,705 | ||||||||
Net investment income |
840 | 827 | 3,343 | 3,380 | ||||||||||||
Net investment gains (losses) |
13 | 5 | 23 | (220 | ) | |||||||||||
Insurance and investment product fees and other |
367 | 440 | 1,619 | 1,503 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
2,538 | 2,624 | 10,023 | 10,368 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Benefits and expenses: |
||||||||||||||||
Benefits and other changes in policy reserves |
1,401 | 1,392 | 5,378 | 5,941 | ||||||||||||
Interest credited |
193 | 195 | 775 | 794 | ||||||||||||
Acquisition and operating expenses, net of deferrals |
330 | 569 | 1,866 | 2,294 | ||||||||||||
Amortization of deferred acquisition costs and intangibles |
145 | 133 | 727 | 598 | ||||||||||||
Goodwill impairment |
| 29 | 89 | 29 | ||||||||||||
Interest expense |
124 | 121 | 476 | 506 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total benefits and expenses |
2,193 | 2,439 | 9,311 | 10,162 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes |
345 | 185 | 712 | 206 | ||||||||||||
Provision for income taxes |
81 | 10 | 189 | 18 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
264 | 175 | 523 | 188 | ||||||||||||
Less: net income attributable to noncontrolling interests |
98 | 33 | 200 | 139 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income available to Genworth Financial, Inc.s common stockholders |
$ | 166 | $ | 142 | $ | 323 | $ | 49 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income available to Genworth Financial, Inc.s common stockholders per common share: |
||||||||||||||||
Basic |
$ | 0.34 | $ | 0.29 | $ | 0.66 | $ | 0.10 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
$ | 0.34 | $ | 0.29 | $ | 0.65 | $ | 0.10 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average common shares outstanding: |
||||||||||||||||
Basic |
491.9 | 490.9 | 491.6 | 490.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
493.9 | 492.7 | 494.4 | 493.5 | ||||||||||||
|
|
|
|
|
|
|
|
21
Reconciliation of Net Operating Income to Net Income
(Amounts in millions, except per share amounts)
Three months ended December 31, |
Twelve months ended December 31, |
|||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net operating income (loss): |
||||||||||||||||
U.S. Life Insurance Division |
||||||||||||||||
U.S. Life Insurance segment |
||||||||||||||||
Life Insurance |
$ | 49 | $ | 48 | $ | 107 | $ | 211 | ||||||||
Long Term Care |
7 | 28 | 101 | 99 | ||||||||||||
Fixed Annuities |
20 | 18 | 82 | 78 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total U.S. Life Insurance segment |
76 | 94 | 290 | 388 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total U.S. Life Insurance Division |
76 | 94 | 290 | 388 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Global Mortgage Insurance Division |
||||||||||||||||
International Mortgage Insurance segment |
||||||||||||||||
Canada3 |
114 | 40 | 234 | 159 | ||||||||||||
Australia |
62 | 54 | 142 | 196 | ||||||||||||
Other Countries |
(11 | ) | (11 | ) | (34 | ) | (27 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total International Mortgage Insurance segment |
165 | 83 | 342 | 328 | ||||||||||||
U.S. Mortgage Insurance segment |
(34 | ) | (96 | ) | (140 | ) | (513 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Global Mortgage Insurance Division |
131 | (13 | ) | 202 | (185 | ) | ||||||||||
|
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|
|
|
|
|
|
|||||||||
Corporate and Other Division |
||||||||||||||||
International Protection segment |
8 | 19 | 24 | 91 | ||||||||||||
Wealth Management segment |
8 | 12 | 42 | 47 | ||||||||||||
Runoff segment |
8 | 15 | 46 | 27 | ||||||||||||
Corporate and Other |
(64 | ) | (3 | ) | (205 | ) | (220 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Corporate and Other Division |
(40 | ) | 43 | (93 | ) | (55 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net operating income |
167 | 124 | 399 | 148 | ||||||||||||
Adjustments to net operating income: |
||||||||||||||||
Net investment gains (losses), net of taxes and other adjustments |
1 | 1 | (3 | ) | (116 | ) | ||||||||||
Goodwill impairment, net of taxes |
| (19 | ) | (86 | ) | (19 | ) | |||||||||
Gain on sale of business, net of taxes |
(2 | ) | 36 | 13 | 36 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income available to Genworth Financial, Inc.s common stockholders |
166 | 142 | 323 | 49 | ||||||||||||
Add: net income attributable to noncontrolling interests |
98 | 33 | 200 | 139 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
$ | 264 | $ | 175 | $ | 523 | $ | 188 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income available to Genworth Financial, Inc.s common stockholders per common share: |
||||||||||||||||
Basic |
$ | 0.34 | $ | 0.29 | $ | 0.66 | $ | 0.10 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
$ | 0.34 | $ | 0.29 | $ | 0.65 | $ | 0.10 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net operating income per common share: |
||||||||||||||||
Basic |
$ | 0.34 | $ | 0.25 | $ | 0.81 | $ | 0.30 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
$ | 0.34 | $ | 0.25 | $ | 0.81 | $ | 0.30 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average common shares outstanding: |
||||||||||||||||
Basic |
491.9 | 490.9 | 491.6 | 490.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
493.9 | 492.7 | 494.4 | 493.5 | ||||||||||||
|
|
|
|
|
|
|
|
22
Condensed Consolidated Balance Sheets
(Amounts in millions)
December 31, 2012 |
December 31, 2011 |
|||||||
Assets |
||||||||
Cash, cash equivalents and invested assets |
$ | 78,757 | $ | 77,083 | ||||
Deferred acquisition costs |
5,036 | 5,193 | ||||||
Intangible assets |
481 | 580 | ||||||
Goodwill |
1,128 | 1,253 | ||||||
Reinsurance recoverable |
17,230 | 16,998 | ||||||
Deferred tax and other assets |
743 | 958 | ||||||
Separate account assets |
9,937 | 10,122 | ||||||
|
|
|
|
|||||
Total assets |
$ | 113,312 | $ | 112,187 | ||||
|
|
|
|
|||||
Liabilities and stockholders equity |
||||||||
Liabilities: |
||||||||
Future policy benefits |
$ | 33,505 | $ | 32,175 | ||||
Policyholder account balances |
26,262 | 26,345 | ||||||
Liability for policy and contract claims |
7,509 | 7,620 | ||||||
Unearned premiums |
4,333 | 4,223 | ||||||
Deferred tax and other liabilities |
6,763 | 7,146 | ||||||
Borrowings related to securitization entities |
336 | 396 | ||||||
Non-recourse funding obligations |
2,066 | 3,256 | ||||||
Long-term borrowings |
4,776 | 4,726 | ||||||
Separate account liabilities |
9,937 | 10,122 | ||||||
|
|
|
|
|||||
Total liabilities |
95,487 | 96,009 | ||||||
|
|
|
|
|||||
Stockholders equity: |
||||||||
Common stock |
1 | 1 | ||||||
Additional paid-in capital |
12,127 | 12,136 | ||||||
|
|
|
|
|||||
Accumulated other comprehensive income (loss): |
||||||||
Net unrealized investment gains (losses): |
||||||||
Net unrealized gains (losses) on securities not other-than-temporarily impaired |
2,692 | 1,617 | ||||||
Net unrealized gains (losses) on other-than-temporarily impaired securities |
(54 | ) | (132 | ) | ||||
|
|
|
|
|||||
Net unrealized investment gains (losses) |
2,638 | 1,485 | ||||||
|
|
|
|
|||||
Derivatives qualifying as hedges |
1,909 | 2,009 | ||||||
Foreign currency translation and other adjustments |
655 | 553 | ||||||
|
|
|
|
|||||
Total accumulated other comprehensive income (loss) |
5,202 | 4,047 | ||||||
Retained earnings |
1,907 | 1,584 | ||||||
Treasury stock, at cost |
(2,700 | ) | (2,700 | ) | ||||
|
|
|
|
|||||
Total Genworth Financial, Inc.s stockholders equity |
16,537 | 15,068 | ||||||
Noncontrolling interests |
1,288 | 1,110 | ||||||
|
|
|
|
|||||
Total stockholders equity |
17,825 | 16,178 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders equity |
$ | 113,312 | $ | 112,187 | ||||
|
|
|
|
23
Impact of Foreign Exchange on Operating Results10
Three months ended December 31, 2012
Percentages Including Foreign Exchange |
Percentages Excluding Foreign Exchange11 |
|||||||
Canada Mortgage Insurance (MI): |
||||||||
Flow new insurance written |
(15 | )% | (17 | )% | ||||
Flow new insurance written (4Q12 vs. 3Q12) |
(39 | )% | (40 | )% | ||||
Australia MI: |
||||||||
Flow new insurance written |
22 | % | 19 | % | ||||
Flow new insurance written (4Q12 vs. 3Q12) |
9 | % | 8 | % | ||||
International Protection: |
||||||||
Sales |
(7 | )% | (3 | )% | ||||
Sales (4Q12 vs. 3Q12) |
3 | % | (1 | )% |
10 | All percentages are comparing the fourth quarter of 2012 to the fourth quarter of 2011 unless otherwise stated. |
11 | The impact of foreign exchange was calculated using the comparable prior period exchange rates. |
24
Reconciliation of Core Yield to Reported Yield
(Assets - amounts in billions) |
For the three months ended December 31, 2012 |
|||
Reported Total Invested Assets and Cash |
$ | 78.0 | ||
Subtract: |
||||
Securities lending |
0.2 | |||
Unrealized gains (losses) |
7.2 | |||
Derivative counterparty collateral |
0.8 | |||
|
|
|||
Adjusted end of period invested assets |
$ | 69.8 | ||
|
|
|||
Average Invested Assets Used in Reported Yield Calculation |
$ | 70.0 | ||
Subtract: |
||||
Restricted commercial mortgage loans and other invested assets related to securitization entities12 |
0.3 | |||
|
|
|||
Average Invested Assets Used in Core Yield Calculation |
$ | 69.7 | ||
|
|
|||
(Income - amounts in millions) |
||||
Reported Net Investment Income |
$ | 840 | ||
Subtract: |
||||
Bond calls and commercial mortgage loan prepayments |
13 | |||
Reinsurance13 |
16 | |||
Other non-core items14 |
13 | |||
Restricted commercial mortgage loans and other invested assets related to securitization entities12 |
5 | |||
|
|
|||
Core Net Investment Income |
$ | 793 | ||
|
|
|||
Reported Yield |
4.80 | % | ||
|
|
|||
Core Yield |
4.55 | % | ||
|
|
12 | Represents the incremental assets and investment income related to restricted commercial mortgage loans and other invested assets. |
13 | Represents imputed investment income related to reinsurance agreements in the lifestyle protection insurance business. |
14 | Includes mark-to-market adjustment on assets supporting executive deferred compensation and various other immaterial items. |
25
Exhibit 99.2
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Table of Contents |
Page | |||
3 | ||||
Use of Non-GAAP Measures and Selected Operating Performance Measures |
4 | |||
5 | ||||
7 | ||||
8 | ||||
9 | ||||
10 | ||||
11-12 | ||||
13-14 | ||||
15 | ||||
17-26 | ||||
Net Operating Income (Loss) and SalesGlobal Mortgage Insurance Division |
28-50 | |||
Net Operating Income (Loss) and SalesCorporate and Other Division |
52-65 | |||
67 | ||||
68 | ||||
69-70 | ||||
71 | ||||
Net Investment Gains (Losses), Net of Taxes and Other AdjustmentsDetail |
72 | |||
74 | ||||
75 | ||||
76 | ||||
77 | ||||
79-80 |
Note:
Unless otherwise noted, references in this financial supplement to net income (loss), net income (loss) per share, net operating income (loss), net operating income (loss) per share, book value and book value per common share should be read as net income (loss) available to Genworth Financial, Inc.s common stockholders, net income (loss) available to Genworth Financial, Inc.s common stockholders per share, net operating income (loss) available to Genworth Financial, Inc.s common stockholders, net operating income (loss) available to Genworth Financial, Inc.s common stockholders per share, book value available to Genworth Financial, Inc.s common stockholders and book value available to Genworth Financial, Inc.s common stockholders per share, respectively.
2
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Dear Investor,
The fourth quarter financial supplement reflects the following changes in divisions, reflecting our strategy announced in October 2012:
a. | U.S. Life Insurance Division |
i. | U.S. Life Insurance segment |
1. | Life Insurance |
2. | Long-Term Care |
3. | Fixed Annuities |
b. | Corporate and Other Division |
i. | International Protection segment |
ii. | Wealth Management segment |
iii. | Runoff segment |
iv. | Corporate and Other |
Once again, thank you for your continued interest in Genworth Financial.
Please feel free to call with any questions or comments.
Regards,
Georgette Nicholas
Investor Relations
804 662.2248
3
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
This financial supplement includes the non-GAAP(1) financial measure entitled net operating income (loss). The chief operating decision maker evaluates segment performance and allocates resources on the basis of net operating income (loss) available to Genworth Financial, Inc.s common stockholders. The company defines net operating income (loss) available to Genworth Financial, Inc.s common stockholders as income (loss) from continuing operations excluding the after-tax effects of income attributable to noncontrolling interests, net investment gains (losses), goodwill impairments, gains (losses) on the sale of businesses and infrequent or unusual non-operating items. The company excludes net investment gains (losses) and infrequent or unusual non-operating items because the company does not consider them to be related to the operating performance of the companys segments and Corporate and Other activities. A component of the companys net investment gains (losses) is the result of impairments, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to the companys discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Goodwill impairments and gains (losses) on the sale of businesses are also excluded from net operating income (loss) available to Genworth Financial, Inc.s common stockholders because, in the companys opinion, they are not indicative of overall operating trends. Other non-operating items are also excluded from net operating income (loss) available to Genworth Financial, Inc.s common stockholders if, in the companys opinion, they are not indicative of overall operating trends.
While some of these items may be significant components of net income (loss) available to Genworth Financial, Inc.s common stockholders in accordance with GAAP, the company believes that net operating income (loss) available to Genworth Financial, Inc.s common stockholders and measures that are derived from or incorporate net operating income (loss) available to Genworth Financial, Inc.s common stockholders, including net operating income (loss) available to Genworth Financial, Inc.s common stockholders per common share on a basic and diluted basis, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses net operating income (loss) available to Genworth Financial, Inc.s common stockholders as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. However, the items excluded from net operating income (loss) available to Genworth Financial, Inc.s common stockholders have occurred in the past and could, and in some cases will, recur in the future. Net operating income (loss) available to Genworth Financial, Inc.s common stockholders and net operating income (loss) available to Genworth Financial, Inc.s common stockholders per common share on a basic and diluted basis are not substitutes for net income (loss) available to Genworth Financial, Inc.s common stockholders or net income (loss) available to Genworth Financial, Inc.s common stockholders per common share on a basic and diluted basis determined in accordance with GAAP. In addition, the companys definition of net operating income (loss) available to Genworth Financial, Inc.s common stockholders may differ from the definitions used by other companies.
The table on page 10 of this financial supplement reflects net operating income (loss) as determined in accordance with accounting guidance related to segment reporting, and a reconciliation of net operating income (loss) of the companys segments and Corporate and Other activities to net income (loss) available to Genworth Financial, Inc.s common stockholders for the periods presented. The financial supplement includes other non-GAAP measures management believes enhances the understanding and comparability of performance by highlighting underlying business activity and profitability drivers. These additional non-GAAP measures are on pages 74 through 77 of this financial supplement.
Selected Operating Performance Measures
This financial supplement contains selected operating performance measures including sales, assets under management and insurance in-force or risk in-force which are commonly used in the insurance and investment industries as measures of operating performance.
Management regularly monitors and reports sales metrics as a measure of volume of new and renewal business generated in a period. Sales refer to: (1) annualized first-year premiums for term life and long-term care insurance; (2) annualized first-year deposits plus 5% of excess deposits for universal and term universal life insurance products; (3) 10% of premium deposits for linked-benefits products; (4) new and additional premiums/deposits for fixed annuities; (5) new insurance written for mortgage insurance; (6) written premiums and deposits, gross of ceded reinsurance and cancellations, and premium equivalents, where the company earns a fee for administrative services only business, for the lifestyle protection insurance business; and (7) gross flows and net flows, which represent gross flows less redemptions, for the wealth management business. Sales do not include renewal premiums on policies or contracts written during prior periods. The company considers annualized first-year premiums, premium equivalents, new premiums/deposits, gross and net flows, written premiums and new insurance written to be a measure of the companys operating performance because they represent a measure of new sales of insurance policies or contracts during a specified period, rather than a measure of the companys revenues or profitability during that period.
Management regularly monitors and reports assets under management for the wealth management business, insurance in-force and risk in-force. Assets under management for the wealth management business represent third-party assets under management that are not consolidated in the companys financial statements. Insurance in-force for the life, international mortgage and U.S. mortgage insurance businesses is a measure of the aggregate face value of outstanding insurance policies as of the respective reporting date. For the risk in-force in the international mortgage insurance business, the company has computed an effective risk in-force amount, which recognizes that the loss on any particular loan will be reduced by the net proceeds received upon sale of the property. Effective risk in-force has been calculated by applying to insurance in-force a factor of 35% that represents the highest expected average per-claim payment for any one underwriting year over the life of the companys businesses in Canada and Australia. Risk in-force for the U.S. mortgage insurance business is the obligation that is limited under contractual terms to the amounts less than 100% of the mortgage loan value. The company considers assets under management for the wealth management business, insurance in-force and risk in-force to be a measure of the companys operating performance because they represent a measure of the size of the business at a specific date which will generate revenues and profits in a future period, rather than a measure of the companys revenues or profitability during that period.
This financial supplement also includes information related to loss mitigation activities for the U.S. mortgage insurance business. The company defines loss mitigation activities as rescissions, cancellations, borrower loan modifications, repayment plans, lender- and borrower-titled presales, claims administration and other loan workouts. Estimated savings related to rescissions are the reduction in carried loss reserves, net of premium refunds and reinstatement of prior rescissions. Estimated savings related to loan modifications and other cure related loss mitigation actions represent the reduction in carried loss reserves. For non-cure related actions, including presales, the estimated savings represent the difference between the full claim obligation and the actual amount paid. The company believes that this information helps to enhance the understanding of the operating performance of the U.S. mortgage insurance business as loss mitigation activities specifically impact current and future loss reserves and level of claim payments.
These operating measures enable the company to compare its operating performance across periods without regard to revenues or profitability related to policies or contracts sold in prior periods or from investments or other sources.
(1) | U.S. Generally Accepted Accounting Principles |
4
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
(amounts in millions, except per share data)
Balance Sheet Data |
December 31, 2012 |
September 30, 2012 |
June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
|||||||||||||||
Total Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income |
$ | 11,335 | $ | 11,204 | $ | 11,164 | $ | 11,082 | $ | 11,021 | ||||||||||
Total accumulated other comprehensive income |
5,202 | 5,223 | 4,653 | 3,656 | 4,047 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Genworth Financial, Inc.s stockholders equity |
$ | 16,537 | $ | 16,427 | $ | 15,817 | $ | 14,738 | $ | 15,068 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Book value per common share |
$ | 33.62 | $ | 33.40 | $ | 32.17 | $ | 29.99 | $ | 30.69 | ||||||||||
Book value per common share, excluding accumulated other comprehensive income |
$ | 23.04 | $ | 22.78 | $ | 22.71 | $ | 22.55 | $ | 22.45 | ||||||||||
Common shares outstanding as of the balance sheet date |
491.9 | 491.8 | 491.6 | 491.5 | 490.9 | |||||||||||||||
Twelve months ended | ||||||||||||||||||||
Twelve Month Rolling Average ROE |
December 31, 2012 |
September 30, 2012 |
June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
|||||||||||||||
GAAP Basis ROE |
2.9% | 2.7% | 2.3% | 0.3% | 0.4% | |||||||||||||||
Operating ROE(1) |
3.6% | 3.2% | 2.7% | 0.9% | 1.4% | |||||||||||||||
Three months ended | ||||||||||||||||||||
Quarterly Average ROE |
December 31, 2012 |
September 30, 2012 |
June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
|||||||||||||||
GAAP Basis ROE |
5.9% | 1.2% | 2.7% | 1.7% | 5.2% | |||||||||||||||
Operating ROE(1) |
5.9% | 4.3% | 2.9% | 1.1% | 4.5% |
Basic and Diluted Shares |
Three months ended December 31, 2012 |
Twelve months ended December 31, 2012 |
||||||
Weighted-average shares used in basic earnings per common share calculations |
491.9 | 491.6 | ||||||
Potentially dilutive securities: |
||||||||
Stock options, restricted stock units and stock appreciation rights |
2.0 | 2.8 | ||||||
|
|
|
|
|||||
Weighted-average shares used in diluted earnings per common share calculations |
493.9 | 494.4 | ||||||
|
|
|
|
(1) | See page 74 herein for a reconciliation of GAAP Basis ROE to Operating ROE. |
5
6
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
(amounts in millions)
Three months ended December 31, |
Twelve months ended December 31, |
|||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
REVENUES: |
||||||||||||||||
Premiums |
$ | 1,318 | $ | 1,352 | $ | 5,038 | $ | 5,705 | ||||||||
Net investment income |
840 | 827 | 3,343 | 3,380 | ||||||||||||
Net investment gains (losses) |
13 | 5 | 23 | (220 | ) | |||||||||||
Insurance and investment product fees and other |
367 | 440 | 1,619 | 1,503 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
2,538 | 2,624 | 10,023 | 10,368 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||
Benefits and other changes in policy reserves |
1,401 | 1,392 | 5,378 | 5,941 | ||||||||||||
Interest credited |
193 | 195 | 775 | 794 | ||||||||||||
Acquisition and operating expenses, net of deferrals |
330 | 569 | 1,866 | 2,294 | ||||||||||||
Amortization of deferred acquisition costs and intangibles |
145 | 133 | 727 | 598 | ||||||||||||
Goodwill impairment |
| 29 | 89 | 29 | ||||||||||||
Interest expense |
124 | 121 | 476 | 506 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total benefits and expenses |
2,193 | 2,439 | 9,311 | 10,162 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
INCOME BEFORE INCOME TAXES |
345 | 185 | 712 | 206 | ||||||||||||
Provision for income taxes |
81 | 10 | 189 | 18 | ||||||||||||
Effective tax rate |
23.5 | % | 5.4 | % | 26.5 | % | 8.7 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INCOME |
264 | 175 | 523 | 188 | ||||||||||||
Less: net income attributable to noncontrolling interests |
98 | 33 | 200 | 139 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
$ | 166 | $ | 142 | $ | 323 | $ | 49 | ||||||||
|
|
|
|
|
|
|
|
7
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income by Segment
(amounts in millions, except per share amounts)
Three months ended December 31, |
Twelve months ended December 31, |
|||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
U.S. Life Insurance Division |
||||||||||||||||
U.S. Life Insurance segment: |
||||||||||||||||
Life Insurance |
$ | 49 | $ | 48 | $ | 107 | $ | 211 | ||||||||
Long-Term Care |
7 | 28 | 101 | 99 | ||||||||||||
Fixed Annuities |
20 | 18 | 82 | 78 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total U.S. Life Insurance segment |
76 | 94 | 290 | 388 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total U.S. Life Insurance Division |
76 | 94 | 290 | 388 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Global Mortgage Insurance Division |
||||||||||||||||
International Mortgage Insurance segment: |
||||||||||||||||
Canada |
114 | 40 | 234 | 159 | ||||||||||||
Australia |
62 | 54 | 142 | 196 | ||||||||||||
Other Countries |
(11 | ) | (11 | ) | (34 | ) | (27 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total International Mortgage Insurance segment |
165 | 83 | 342 | 328 | ||||||||||||
U.S. Mortgage Insurance segment |
(34 | ) | (96 | ) | (140 | ) | (513 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Global Mortgage Insurance Division |
131 | (13 | ) | 202 | (185 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Corporate and Other Division |
||||||||||||||||
International Protection segment |
8 | 19 | 24 | 91 | ||||||||||||
Wealth Management segment |
8 | 12 | 42 | 47 | ||||||||||||
Runoff segment |
8 | 15 | 46 | 27 | ||||||||||||
Corporate and Other |
(64 | ) | (3 | ) | (205 | ) | (220 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Corporate and Other Division |
(40 | ) | 43 | (93 | ) | (55 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
NET OPERATING INCOME |
167 | 124 | 399 | 148 | ||||||||||||
ADJUSTMENTS TO NET OPERATING INCOME: |
||||||||||||||||
Net investment gains (losses), net of taxes and other adjustments(1) |
1 | 1 | (3 | ) | (116 | ) | ||||||||||
Goodwill impairment, net of taxes |
| (19 | ) | (86 | ) | (19 | ) | |||||||||
Gain on sale of business, net of taxes |
(2 | ) | 36 | 13 | 36 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
166 | 142 | 323 | 49 | ||||||||||||
Add: net income attributable to noncontrolling interests |
98 | 33 | 200 | 139 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INCOME |
$ | 264 | $ | 175 | $ | 523 | $ | 188 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings Per Share Data: |
||||||||||||||||
Net income available to Genworth Financial, Inc.s common stockholders per common share |
||||||||||||||||
Basic |
$ | 0.34 | $ | 0.29 | $ | 0.66 | $ | 0.10 | ||||||||
Diluted |
$ | 0.34 | $ | 0.29 | $ | 0.65 | $ | 0.10 | ||||||||
Net operating income per common share |
||||||||||||||||
Basic |
$ | 0.34 | $ | 0.25 | $ | 0.81 | $ | 0.30 | ||||||||
Diluted |
$ | 0.34 | $ | 0.25 | $ | 0.81 | $ | 0.30 | ||||||||
Weighted-average shares outstanding |
||||||||||||||||
Basic |
491.9 | 490.9 | 491.6 | 490.6 | ||||||||||||
Diluted |
493.9 | 492.7 | 494.4 | 493.5 |
(1) | See page 72 for details on net investment gains (losses), net of taxes and other adjustments. |
8
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Consolidated Net Income (Loss) by Quarter
(amounts in millions, except per share amounts)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 1,318 | $ | 1,311 | $ | 1,302 | $ | 1,107 | $ | 5,038 | $ | 1,352 | $ | 1,461 | $ | 1,455 | $ | 1,437 | $ | 5,705 | ||||||||||||||||||||
Net investment income |
840 | 825 | 846 | 832 | 3,343 | 827 | 842 | 881 | 830 | 3,380 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
13 | 9 | (34 | ) | 35 | 23 | 5 | (157 | ) | (40 | ) | (28 | ) | (220 | ) | |||||||||||||||||||||||||
Insurance and investment product fees and other |
367 | 391 | 409 | 452 | 1,619 | 440 | 375 | 359 | 329 | 1,503 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenues |
2,538 | 2,536 | 2,523 | 2,426 | 10,023 | 2,624 | 2,521 | 2,655 | 2,568 | 10,368 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
1,401 | 1,363 | 1,382 | 1,232 | 5,378 | 1,392 | 1,457 | 1,679 | 1,413 | 5,941 | ||||||||||||||||||||||||||||||
Interest credited |
193 | 193 | 194 | 195 | 775 | 195 | 194 | 204 | 201 | 794 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
330 | 504 | 502 | 530 | 1,866 | 569 | 581 | 581 | 563 | 2,294 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
145 | 162 | 148 | 272 | 727 | 133 | 152 | 162 | 151 | 598 | ||||||||||||||||||||||||||||||
Goodwill impairment |
| 89 | | | 89 | 29 | | | | 29 | ||||||||||||||||||||||||||||||
Interest expense |
124 | 126 | 131 | 95 | 476 | 121 | 124 | 134 | 127 | 506 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total benefits and expenses |
2,193 | 2,437 | 2,357 | 2,324 | 9,311 | 2,439 | 2,508 | 2,760 | 2,455 | 10,162 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
345 | 99 | 166 | 102 | 712 | 185 | 13 | (105 | ) | 113 | 206 | |||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
81 | 29 | 57 | 22 | 189 | 10 | (7 | ) | (5 | ) | 20 | 18 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET INCOME (LOSS) |
264 | 70 | 109 | 80 | 523 | 175 | 20 | (100 | ) | 93 | 188 | |||||||||||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
98 | 36 | 33 | 33 | 200 | 33 | 36 | 36 | 34 | 139 | ||||||||||||||||||||||||||||||
|
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|
|
|
|
|
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|
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NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
$ | 166 | $ | 34 | $ | 76 | $ | 47 | $ | 323 | $ | 142 | $ | (16 | ) | $ | (136 | ) | $ | 59 | $ | 49 | ||||||||||||||||||
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Earnings (Loss) Per Share Data: |
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Net income (loss) available to Genworth Financial, Inc.s common stockholders per common share |
||||||||||||||||||||||||||||||||||||||||
Basic |
$ | 0.34 | $ | 0.07 | $ | 0.16 | $ | 0.09 | $ | 0.66 | $ | 0.29 | $ | (0.03 | ) | $ | (0.28 | ) | $ | 0.12 | $ | 0.10 | ||||||||||||||||||
Diluted |
$ | 0.34 | $ | 0.07 | $ | 0.16 | $ | 0.09 | $ | 0.65 | $ | 0.29 | $ | (0.03 | ) | $ | (0.28 | ) | $ | 0.12 | $ | 0.10 | ||||||||||||||||||
Weighted-average shares outstanding |
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Basic |
491.9 | 491.7 | 491.5 | 491.2 | 491.6 | 490.9 | 490.8 | 490.6 | 490.1 | 490.6 | ||||||||||||||||||||||||||||||
Diluted |
493.9 | 493.9 | 493.9 | 495.7 | 494.4 | 492.7 | 490.8 | 490.6 | 494.4 | 493.5 |
9
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income (Loss) by Segment by Quarter
(amounts in millions, except per share amounts)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
U.S. Life Insurance Division |
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U.S. Life Insurance segment: |
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Life Insurance |
$ | 49 | $ | 22 | $ | 30 | $ | 6 | $ | 107 | $ | 48 | $ | 64 | $ | 57 | $ | 42 | $ | 211 | ||||||||||||||||||||
Long-Term Care |
7 | 45 | 14 | 35 | 101 | 28 | 17 | 18 | 36 | 99 | ||||||||||||||||||||||||||||||
Fixed Annuities |
20 | 19 | 20 | 23 | 82 | 18 | 21 | 25 | 14 | 78 | ||||||||||||||||||||||||||||||
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Total U.S. Life Insurance segment |
76 | 86 | 64 | 64 | 290 | 94 | 102 | 100 | 92 | 388 | ||||||||||||||||||||||||||||||
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Total U.S. Life Insurance Division |
76 | 86 | 64 | 64 | 290 | 94 | 102 | 100 | 92 | 388 | ||||||||||||||||||||||||||||||
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Global Mortgage Insurance Division |
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International Mortgage Insurance segment: |
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Canada |
114 | 42 | 41 | 37 | 234 | 40 | 40 | 28 | 51 | 159 | ||||||||||||||||||||||||||||||
Australia |
62 | 57 | 44 | (21 | ) | 142 | 54 | 36 | 54 | 52 | 196 | |||||||||||||||||||||||||||||
Other Countries |
(11 | ) | (5 | ) | (9 | ) | (9 | ) | (34 | ) | (11 | ) | (8 | ) | (4 | ) | (4 | ) | (27 | ) | ||||||||||||||||||||
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Total International Mortgage Insurance segment |
165 | 94 | 76 | 7 | 342 | 83 | 68 | 78 | 99 | 328 | ||||||||||||||||||||||||||||||
U.S. Mortgage Insurance segment |
(34 | ) | (38 | ) | (25 | ) | (43 | ) | (140 | ) | (96 | ) | (79 | ) | (255 | ) | (83 | ) | (513 | ) | ||||||||||||||||||||
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Total Global Mortgage Insurance Division |
131 | 56 | 51 | (36 | ) | 202 | (13 | ) | (11 | ) | (177 | ) | 16 | (185 | ) | |||||||||||||||||||||||||
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Corporate and Other Division |
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International Protection segment |
8 | 8 | 3 | 5 | 24 | 19 | 22 | 25 | 25 | 91 | ||||||||||||||||||||||||||||||
Wealth Management segment |
8 | 10 | 12 | 12 | 42 | 12 | 12 | 13 | 10 | 47 | ||||||||||||||||||||||||||||||
Runoff segment |
8 | 9 | (6 | ) | 35 | 46 | 15 | (7 | ) | 18 | 1 | 27 | ||||||||||||||||||||||||||||
Corporate and Other |
(64 | ) | (48 | ) | (44 | ) | (49 | ) | (205 | ) | (3 | ) | (56 | ) | (92 | ) | (69 | ) | (220 | ) | ||||||||||||||||||||
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Total Corporate and Other Division |
(40 | ) | (21 | ) | (35 | ) | 3 | (93 | ) | 43 | (29 | ) | (36 | ) | (33 | ) | (55 | ) | ||||||||||||||||||||||
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NET OPERATING INCOME (LOSS) |
167 | 121 | 80 | 31 | 399 | 124 | 62 | (113 | ) | 75 | 148 | |||||||||||||||||||||||||||||
ADJUSTMENTS TO NET OPERATING INCOME (LOSS): |
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Net investment gains (losses), net of taxes and other adjustments |
1 | (1 | ) | (19 | ) | 16 | (3 | ) | 1 | (78 | ) | (23 | ) | (16 | ) | (116 | ) | |||||||||||||||||||||||
Goodwill impairment, net of taxes |
| (86 | ) | | | (86 | ) | (19 | ) | | | | (19 | ) | ||||||||||||||||||||||||||
Gain on sale of business, net of taxes |
(2 | ) | | 15 | | 13 | 36 | | | | 36 | |||||||||||||||||||||||||||||
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NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
166 | 34 | 76 | 47 | 323 | 142 | (16 | ) | (136 | ) | 59 | 49 | ||||||||||||||||||||||||||||
Add: net income attributable to noncontrolling interests |
98 | 36 | 33 | 33 | 200 | 33 | 36 | 36 | 34 | 139 | ||||||||||||||||||||||||||||||
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NET INCOME (LOSS) |
$ | 264 | $ | 70 | $ | 109 | $ | 80 | $ | 523 | $ | 175 | $ | 20 | $ | (100 | ) | $ | 93 | $ | 188 | |||||||||||||||||||
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Earnings (Loss) Per Share Data: |
||||||||||||||||||||||||||||||||||||||||
Net income (loss) available to Genworth Financial, Inc.s common stockholders per common share |
||||||||||||||||||||||||||||||||||||||||
Basic |
$ | 0.34 | $ | 0.07 | $ | 0.16 | $ | 0.09 | $ | 0.66 | $ | 0.29 | $ | (0.03 | ) | $ | (0.28 | ) | $ | 0.12 | $ | 0.10 | ||||||||||||||||||
Diluted |
$ | 0.34 | $ | 0.07 | $ | 0.16 | $ | 0.09 | $ | 0.65 | $ | 0.29 | $ | (0.03 | ) | $ | (0.28 | ) | $ | 0.12 | $ | 0.10 | ||||||||||||||||||
Net operating income (loss) per common share |
||||||||||||||||||||||||||||||||||||||||
Basic |
$ | 0.34 | $ | 0.25 | $ | 0.16 | $ | 0.06 | $ | 0.81 | $ | 0.25 | $ | 0.13 | $ | (0.23 | ) | $ | 0.15 | $ | 0.30 | |||||||||||||||||||
Diluted |
$ | 0.34 | $ | 0.25 | $ | 0.16 | $ | 0.06 | $ | 0.81 | $ | 0.25 | $ | 0.13 | $ | (0.23 | ) | $ | 0.15 | $ | 0.30 | |||||||||||||||||||
Weighted-average shares outstanding |
||||||||||||||||||||||||||||||||||||||||
Basic |
491.9 | 491.7 | 491.5 | 491.2 | 491.6 | 490.9 | 490.8 | 490.6 | 490.1 | 490.6 | ||||||||||||||||||||||||||||||
Diluted(1) |
493.9 | 493.9 | 493.9 | 495.7 | 494.4 | 492.7 | 490.8 | 490.6 | 494.4 | 493.5 |
(1) | Under applicable accounting guidance, companies in a loss position are required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of the companys net loss available to Genworth Financial, Inc.s common stockholders for the three months ended September 30, 2011 and June 30, 2011, the inclusion of 1.7 million and 3.7 million, respectively, shares for stock options, restricted stock units and stock appreciation rights would have been antidilutive to the calculation. If the company had not incurred a net loss available to Genworth Financial, Inc.s common stockholders for the three months ended September 30, 2011 and June 30, 2011, dilutive potential common shares would have been 492.5 million and 494.3 million, respectively. Since the company had net operating income for the three months ended September 30, 2011, the company used 492.5 million diluted weighted-average common shares outstanding in the calculation of diluted net operating income per common share. |
10
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
(amounts in millions)
December 31, 2012 |
September 30, 2012 |
June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
||||||||||||||||
ASSETS |
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Investments: |
||||||||||||||||||||
Fixed maturity securities available-for-sale, at fair value |
$ | 62,161 | $ | 62,214 | $ | 59,791 | $ | 58,532 | $ | 58,295 | ||||||||||
Equity securities available-for-sale, at fair value |
518 | 524 | 431 | 434 | 361 | |||||||||||||||
Commercial mortgage loans |
5,872 | 5,861 | 5,875 | 6,030 | 6,092 | |||||||||||||||
Restricted commercial mortgage loans related to securitization entities |
341 | 359 | 382 | 392 | 411 | |||||||||||||||
Policy loans |
1,601 | 1,626 | 1,619 | 1,555 | 1,549 | |||||||||||||||
Other invested assets |
3,503 | 3,916 | 4,512 | 3,001 | 4,819 | |||||||||||||||
Restricted other invested assets related to securitization entities |
393 | 393 | 391 | 384 | 377 | |||||||||||||||
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Total investments |
74,389 | 74,893 | 73,001 | 70,328 | 71,904 | |||||||||||||||
Cash and cash equivalents |
3,653 | 3,741 | 3,874 | 4,187 | 4,488 | |||||||||||||||
Accrued investment income |
715 | 746 | 652 | 759 | 691 | |||||||||||||||
Deferred acquisition costs |
5,036 | 5,020 | 5,023 | 5,060 | 5,193 | |||||||||||||||
Intangible assets |
481 | 488 | 519 | 573 | 580 | |||||||||||||||
Goodwill |
1,128 | 1,128 | 1,218 | 1,256 | 1,253 | |||||||||||||||
Reinsurance recoverable |
17,230 | 17,195 | 17,177 | 17,193 | 16,998 | |||||||||||||||
Other assets |
743 | 1,010 | 1,039 | 981 | 958 | |||||||||||||||
Separate account assets |
9,937 | 10,166 | 10,033 | 10,646 | 10,122 | |||||||||||||||
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Total assets |
$ | 113,312 | $ | 114,387 | $ | 112,536 | $ | 110,983 | $ | 112,187 | ||||||||||
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11
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Consolidated Balance Sheets
(amounts in millions)
December 31, 2012 |
September 30, 2012 |
June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Future policy benefits |
$ | 33,505 | $ | 33,221 | $ | 32,825 | $ | 32,380 | $ | 32,175 | ||||||||||
Policyholder account balances |
26,262 | 26,449 | 26,160 | 26,204 | 26,345 | |||||||||||||||
Liability for policy and contract claims |
7,509 | 7,545 | 7,552 | 7,663 | 7,620 | |||||||||||||||
Unearned premiums |
4,333 | 4,291 | 4,156 | 4,209 | 4,223 | |||||||||||||||
Other liabilities |
5,218 | 6,073 | 5,790 | 5,308 | 6,308 | |||||||||||||||
Borrowings related to securitization entities |
336 | 353 | 375 | 383 | 396 | |||||||||||||||
Non-recourse funding obligations |
2,066 | 2,325 | 2,598 | 2,602 | 3,256 | |||||||||||||||
Long-term borrowings |
4,776 | 4,880 | 4,865 | 5,095 | 4,726 | |||||||||||||||
Deferred tax liability |
1,545 | 1,437 | 1,216 | 610 | 838 | |||||||||||||||
Separate account liabilities |
9,937 | 10,166 | 10,033 | 10,646 | 10,122 | |||||||||||||||
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Total liabilities |
95,487 | 96,740 | 95,570 | 95,100 | 96,009 | |||||||||||||||
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Stockholders equity: |
||||||||||||||||||||
Common stock |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Additional paid-in capital |
12,127 | 12,162 | 12,156 | 12,150 | 12,136 | |||||||||||||||
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Accumulated other comprehensive income (loss): |
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Net unrealized investment gains (losses): |
||||||||||||||||||||
Net unrealized gains on securities not other-than-temporarily impaired |
2,692 | 2,641 | 2,132 | 1,438 | 1,617 | |||||||||||||||
Net unrealized gains (losses) on other-than-temporarily impaired securities |
(54 | ) | (88 | ) | (116 | ) | (111 | ) | (132 | ) | ||||||||||
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Net unrealized investment gains (losses) |
2,638 | 2,553 | 2,016 | 1,327 | 1,485 | |||||||||||||||
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Derivatives qualifying as hedges |
1,909 | 2,011 | 2,087 | 1,680 | 2,009 | |||||||||||||||
Foreign currency translation and other adjustments |
655 | 659 | 550 | 649 | 553 | |||||||||||||||
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Total accumulated other comprehensive income |
5,202 | 5,223 | 4,653 | 3,656 | 4,047 | |||||||||||||||
Retained earnings |
1,907 | 1,741 | 1,707 | 1,631 | 1,584 | |||||||||||||||
Treasury stock, at cost |
(2,700 | ) | (2,700 | ) | (2,700 | ) | (2,700 | ) | (2,700 | ) | ||||||||||
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Total Genworth Financial, Inc.s stockholders equity |
16,537 | 16,427 | 15,817 | 14,738 | 15,068 | |||||||||||||||
Noncontrolling interests |
1,288 | 1,220 | 1,149 | 1,145 | 1,110 | |||||||||||||||
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Total stockholders equity |
17,825 | 17,647 | 16,966 | 15,883 | 16,178 | |||||||||||||||
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Total liabilities and stockholders equity |
$ | 113,312 | $ | 114,387 | $ | 112,536 | $ | 110,983 | $ | 112,187 | ||||||||||
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12
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Consolidated Balance Sheet by Segment
(amounts in millions)
December 31, 2012 | ||||||||||||||||||||||||||||||||
U.S. Life Insurance |
International Mortgage Insurance |
U.S. Mortgage Insurance |
International Protection |
Wealth Management |
Runoff | Corporate and Other(1) |
Total | |||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||
Cash and investments |
$ | 57,341 | $ | 9,702 | $ | 2,192 | $ | 1,715 | $ | 31 | $ | 4,065 | $ | 3,711 | $ | 78,757 | ||||||||||||||||
Deferred acquisition costs and intangible assets |
5,368 | 230 | 19 | 267 | 375 | 348 | 38 | 6,645 | ||||||||||||||||||||||||
Reinsurance recoverable |
16,160 | 18 | 96 | 26 | | 930 | | 17,230 | ||||||||||||||||||||||||
Deferred tax and other assets |
345 | 113 | 50 | 137 | 52 | 28 | 18 | 743 | ||||||||||||||||||||||||
Separate account assets |
| | | | | 9,937 | | 9,937 | ||||||||||||||||||||||||
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Total assets |
$ | 79,214 | $ | 10,063 | $ | 2,357 | $ | 2,145 | $ | 458 | $ | 15,308 | $ | 3,767 | $ | 113,312 | ||||||||||||||||
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|||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||
Future policy benefits |
$ | 33,499 | $ | | $ | | $ | | $ | | $ | 6 | $ | | $ | 33,505 | ||||||||||||||||
Policyholder account balances |
21,454 | | | 16 | | 4,792 | | 26,262 | ||||||||||||||||||||||||
Liability for policy and contract claims |
4,857 | 516 | 2,009 | 106 | | 21 | | 7,509 | ||||||||||||||||||||||||
Unearned premiums |
617 | 3,051 | 116 | 539 | | 10 | | 4,333 | ||||||||||||||||||||||||
Non-recourse funding obligations |
2,096 | | | | | | (30 | ) | 2,066 | |||||||||||||||||||||||
Deferred tax and other liabilities |
5,386 | 373 | (845 | ) | 481 | 40 | 105 | 1,223 | 6,763 | |||||||||||||||||||||||
Borrowings and capital securities |
| 573 | | | | 8 | 4,531 | 5,112 | ||||||||||||||||||||||||
Separate account liabilities |
| | | | | 9,937 | | 9,937 | ||||||||||||||||||||||||
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Total liabilities |
67,909 | 4,513 | 1,280 | 1,142 | 40 | 14,879 | 5,724 | 95,487 | ||||||||||||||||||||||||
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Stockholders equity: |
||||||||||||||||||||||||||||||||
Allocated equity, excluding accumulated other comprehensive income (loss) |
6,895 | 3,382 | 1,050 | 925 | 418 | 540 | (1,875 | ) | 11,335 | |||||||||||||||||||||||
Allocated accumulated other comprehensive income (loss) |
4,410 | 880 | 27 | 78 | | (111 | ) | (82 | ) | 5,202 | ||||||||||||||||||||||
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Total Genworth Financial, Inc.s stockholders equity |
11,305 | 4,262 | 1,077 | 1,003 | 418 | 429 | (1,957 | ) | 16,537 | |||||||||||||||||||||||
Noncontrolling interests |
| 1,288 | | | | | | 1,288 | ||||||||||||||||||||||||
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|||||||||||||||||
Total stockholders equity |
11,305 | 5,550 | 1,077 | 1,003 | 418 | 429 | (1,957 | ) | 17,825 | |||||||||||||||||||||||
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Total liabilities and stockholders equity |
$ | 79,214 | $ | 10,063 | $ | 2,357 | $ | 2,145 | $ | 458 | $ | 15,308 | $ | 3,767 | $ | 113,312 | ||||||||||||||||
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(1) | Includes inter-segment eliminations and non-core products. |
13
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Consolidated Balance Sheet by Segment
(amounts in millions)
September 30, 2012 | ||||||||||||||||||||||||||||||||
U.S. Life Insurance |
International Mortgage Insurance |
U.S. Mortgage Insurance |
International Protection |
Wealth Management |
Runoff | Corporate and Other(1) |
Total | |||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||
Cash and investments |
$ | 57,518 | $ | 9,849 | $ | 2,310 | $ | 1,778 | $ | 31 | $ | 4,147 | $ | 3,747 | $ | 79,380 | ||||||||||||||||
Deferred acquisition costs and intangible assets |
5,336 | 239 | 18 | 261 | 373 | 369 | 40 | 6,636 | ||||||||||||||||||||||||
Reinsurance recoverable |
16,115 | 10 | 112 | 26 | | 932 | | 17,195 | ||||||||||||||||||||||||
Deferred tax and other assets |
530 | 135 | 51 | 155 | 56 | 56 | 27 | 1,010 | ||||||||||||||||||||||||
Separate account assets |
| | | | | 10,166 | | 10,166 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total assets |
$ | 79,499 | $ | 10,233 | $ | 2,491 | $ | 2,220 | $ | 460 | $ | 15,670 | $ | 3,814 | $ | 114,387 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||
Future policy benefits |
$ | 33,215 | $ | | $ | | $ | | $ | | $ | 6 | $ | | $ | 33,221 | ||||||||||||||||
Policyholder account balances |
21,458 | | | 17 | | 4,974 | | 26,449 | ||||||||||||||||||||||||
Liability for policy and contract claims |
4,751 | 551 | 2,114 | 107 | | 22 | | 7,545 | ||||||||||||||||||||||||
Unearned premiums |
582 | 3,041 | 116 | 542 | | 10 | | 4,291 | ||||||||||||||||||||||||
Non-recourse funding obligations |
2,500 | | | | | | (175 | ) | 2,325 | |||||||||||||||||||||||
Deferred tax and other liabilities |
5,383 | 655 | (821 | ) | 520 | 35 | 152 | 1,586 | 7,510 | |||||||||||||||||||||||
Borrowings and capital securities |
| 577 | | | | 8 | 4,648 | 5,233 | ||||||||||||||||||||||||
Separate account liabilities |
| | | | | 10,166 | | 10,166 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities |
67,889 | 4,824 | 1,409 | 1,186 | 35 | 15,338 | 6,059 | 96,740 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Stockholders equity: |
||||||||||||||||||||||||||||||||
Allocated equity, excluding accumulated other comprehensive income (loss) |
7,111 | 3,273 | 1,057 | 981 | 425 | 494 | (2,137 | ) | 11,204 | |||||||||||||||||||||||
Allocated accumulated other comprehensive income (loss) |
4,499 | 916 | 25 | 53 | | (162 | ) | (108 | ) | 5,223 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Genworth Financial, Inc.s stockholders equity |
11,610 | 4,189 | 1,082 | 1,034 | 425 | 332 | (2,245 | ) | 16,427 | |||||||||||||||||||||||
Noncontrolling interests |
| 1,220 | | | | | | 1,220 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total stockholders equity |
11,610 | 5,409 | 1,082 | 1,034 | 425 | 332 | (2,245 | ) | 17,647 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities and stockholders equity |
$ | 79,499 | $ | 10,233 | $ | 2,491 | $ | 2,220 | $ | 460 | $ | 15,670 | $ | 3,814 | $ | 114,387 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes inter-segment eliminations and non-core products. |
14
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Deferred Acquisition Costs Rollforward
(amounts in millions)
U.S. Life Insurance(1) |
International Mortgage Insurance |
U.S. Mortgage Insurance |
International Protection |
Wealth Management |
Runoff(2) | Corporate and Other |
Total | |||||||||||||||||||||||||
Unamortized balance as of September 30, 2012 |
$ | 4,658 | $ | 164 | $ | 9 | $ | 238 | $ | | $ | 354 | $ | | $ | 5,423 | ||||||||||||||||
Costs deferred |
118 | 10 | 1 | 25 | | 1 | | 155 | ||||||||||||||||||||||||
Amortization, net of interest accretion |
(65 | ) | (13 | ) | | (26 | ) | | (19 | ) | | (123 | ) | |||||||||||||||||||
Impact of foreign currency translation |
| | | 5 | | | | 5 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Unamortized balance as of December 31, 2012 |
4,711 | 161 | 10 | 242 | | 336 | | 5,460 | ||||||||||||||||||||||||
Effect of accumulated net unrealized investment (gains) losses |
(411 | ) | | | | | (13 | ) | | (424 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance as of December 31, 2012 |
$ | 4,300 | $ | 161 | $ | 10 | $ | 242 | $ | | $ | 323 | $ | | $ | 5,036 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Amortization, net of interest accretion, includes $3 million of amortization related to net investment losses for the policyholder account balances. |
(2) | Amortization, net of interest accretion, includes $6 million of amortization related to net investment losses for the policyholder account balances. |
15
16
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating IncomeU.S. Life Insurance Division
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 759 | $ | 754 | $ | 733 | $ | 543 | $ | 2,789 | $ | 758 | $ | 750 | $ | 738 | $ | 733 | $ | 2,979 | ||||||||||||||||||||
Net investment income |
661 | 644 | 651 | 638 | 2,594 | 632 | 637 | 648 | 621 | 2,538 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
8 | 7 | (21 | ) | (2 | ) | (8 | ) | | (19 | ) | (33 | ) | (21 | ) | (73 | ) | |||||||||||||||||||||||
Insurance and investment product fees and other |
199 | 221 | 192 | 263 | 875 | 176 | 192 | 172 | 146 | 686 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenues |
1,627 | 1,626 | 1,555 | 1,442 | 6,250 | 1,566 | 1,560 | 1,525 | 1,479 | 6,130 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
1,075 | 1,051 | 1,038 | 786 | 3,950 | 968 | 964 | 942 | 915 | 3,789 | ||||||||||||||||||||||||||||||
Interest credited |
161 | 160 | 160 | 162 | 643 | 163 | 160 | 170 | 166 | 659 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
169 | 170 | 169 | 169 | 677 | 193 | 188 | 183 | 172 | 736 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
78 | 94 | 82 | 223 | 477 | 77 | 67 | 77 | 76 | 297 | ||||||||||||||||||||||||||||||
Interest expense |
26 | 24 | 24 | 12 | 86 | 26 | 27 | 25 | 26 | 104 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total benefits and expenses |
1,509 | 1,499 | 1,473 | 1,352 | 5,833 | 1,427 | 1,406 | 1,397 | 1,355 | 5,585 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
118 | 127 | 82 | 90 | 417 | 139 | 154 | 128 | 124 | 545 | ||||||||||||||||||||||||||||||
Provision for income taxes |
40 | 42 | 29 | 32 | 143 | 48 | 50 | 47 | 44 | 189 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET INCOME |
78 | 85 | 53 | 58 | 274 | 91 | 104 | 81 | 80 | 356 | ||||||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME: |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(2 | ) | 1 | 11 | 6 | 16 | 3 | (2 | ) | 19 | 12 | 32 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET OPERATING INCOME |
$ | 76 | $ | 86 | $ | 64 | $ | 64 | $ | 290 | $ | 94 | $ | 102 | $ | 100 | $ | 92 | $ | 388 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||
Effective tax rate (operating income)(1) |
32.7 | % | 32.4 | % | 36.1 | % | 35.6 | % | 34.1 | % | 34.9 | % | 32.3 | % | 36.5 | % | 35.2 | % | 34.7 | % |
(1) | The operating income (loss) effective tax rate for all pages in this financial supplement was calculated using whole dollars. As a result, the percentages shown may differ from an operating income (loss) effective tax rate calculated using the rounded numbers in this financial supplement. |
17
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating IncomeU.S. Life Insurance Division
(amounts in millions)
U.S. Life Insurance Segment | ||||||||||||||||||||
Three months ended December 31, 2012 |
Life Insurance | Long-Term Care | Fixed Annuities | Total U.S. Life Insurance Segment |
Total | |||||||||||||||
REVENUES: |
||||||||||||||||||||
Premiums |
$ | 177 | $ | 552 | $ | 30 | $ | 759 | $ | 759 | ||||||||||
Net investment income |
137 | 273 | 251 | 661 | 661 | |||||||||||||||
Net investment gains (losses) |
10 | 1 | (3 | ) | 8 | 8 | ||||||||||||||
Insurance and investment product fees and other |
198 | | 1 | 199 | 199 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
522 | 826 | 279 | 1,627 | 1,627 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||
Benefits and other changes in policy reserves |
264 | 694 | 117 | 1,075 | 1,075 | |||||||||||||||
Interest credited |
69 | | 92 | 161 | 161 | |||||||||||||||
Acquisition and operating expenses, net of deferrals |
44 | 105 | 20 | 169 | 169 | |||||||||||||||
Amortization of deferred acquisition costs and intangibles |
35 | 17 | 26 | 78 | 78 | |||||||||||||||
Interest expense |
25 | 1 | | 26 | 26 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total benefits and expenses |
437 | 817 | 255 | 1,509 | 1,509 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME BEFORE INCOME TAXES |
85 | 9 | 24 | 118 | 118 | |||||||||||||||
Provision for income taxes |
30 | 1 | 9 | 40 | 40 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME |
55 | 8 | 15 | 78 | 78 | |||||||||||||||
ADJUSTMENT TO NET INCOME: |
||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(6 | ) | (1 | ) | 5 | (2 | ) | (2 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OPERATING INCOME |
$ | 49 | $ | 7 | $ | 20 | $ | 76 | $ | 76 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|||||||||||||||||||
Effective tax rate (operating income) |
34.9 | % | 2.1 | % | 35.1 | % | 32.7 | % | 32.7 | % |
U.S. Life Insurance Segment | ||||||||||||||||||||
Three months ended December 31, 2011 |
Life Insurance | Long-Term Care | Fixed Annuities | Total U.S. Life Insurance Segment |
Total | |||||||||||||||
REVENUES: |
||||||||||||||||||||
Premiums |
$ | 205 | $ | 520 | $ | 33 | $ | 758 | $ | 758 | ||||||||||
Net investment income |
131 | 246 | 255 | 632 | 632 | |||||||||||||||
Net investment gains (losses) |
(13 | ) | 8 | 5 | | | ||||||||||||||
Insurance and investment product fees and other |
174 | 1 | 1 | 176 | 176 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
497 | 775 | 294 | 1,566 | 1,566 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||
Benefits and other changes in policy reserves |
260 | 593 | 115 | 968 | 968 | |||||||||||||||
Interest credited |
64 | | 99 | 163 | 163 | |||||||||||||||
Acquisition and operating expenses, net of deferrals |
55 | 113 | 25 | 193 | 193 | |||||||||||||||
Amortization of deferred acquisition costs and intangibles |
29 | 22 | 26 | 77 | 77 | |||||||||||||||
Interest expense |
26 | | | 26 | 26 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total benefits and expenses |
434 | 728 | 265 | 1,427 | 1,427 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME BEFORE INCOME TAXES |
63 | 47 | 29 | 139 | 139 | |||||||||||||||
Provision for income taxes |
24 | 14 | 10 | 48 | 48 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME |
39 | 33 | 19 | 91 | 91 | |||||||||||||||
ADJUSTMENT TO NET INCOME: |
||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
9 | (5 | ) | (1 | ) | 3 | 3 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OPERATING INCOME |
$ | 48 | $ | 28 | $ | 18 | $ | 94 | $ | 94 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|||||||||||||||||||
Effective tax rate (operating income) |
37.8 | % | 29.1 | % | 35.0 | % | 34.9 | % | 34.9 | % |
18
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating IncomeU.S. Life Insurance Division
(amounts in millions)
U.S. Life Insurance Segment | ||||||||||||||||||||
Twelve months ended December 31, 2012 |
Life Insurance | Long-Term Care | Fixed Annuities | Total U.S. Life Insurance Segment |
Total | |||||||||||||||
REVENUES: |
||||||||||||||||||||
Premiums |
$ | 542 | $ | 2,143 | $ | 104 | $ | 2,789 | $ | 2,789 | ||||||||||
Net investment income |
525 | 1,060 | 1,009 | 2,594 | 2,594 | |||||||||||||||
Net investment gains (losses) |
(6 | ) | | (2 | ) | (8 | ) | (8 | ) | |||||||||||
Insurance and investment product fees and other |
865 | 4 | 6 | 875 | 875 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
1,926 | 3,207 | 1,117 | 6,250 | 6,250 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||
Benefits and other changes in policy reserves |
923 | 2,574 | 453 | 3,950 | 3,950 | |||||||||||||||
Interest credited |
265 | | 378 | 643 | 643 | |||||||||||||||
Acquisition and operating expenses, net of deferrals |
205 | 399 | 73 | 677 | 677 | |||||||||||||||
Amortization of deferred acquisition costs and intangibles |
293 | 82 | 102 | 477 | 477 | |||||||||||||||
Interest expense |
84 | 2 | | 86 | 86 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total benefits and expenses |
1,770 | 3,057 | 1,006 | 5,833 | 5,833 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME BEFORE INCOME TAXES |
156 | 150 | 111 | 417 | 417 | |||||||||||||||
Provision for income taxes |
54 | 49 | 40 | 143 | 143 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME |
102 | 101 | 71 | 274 | 274 | |||||||||||||||
ADJUSTMENT TO NET INCOME: |
||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
5 | | 11 | 16 | 16 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OPERATING INCOME |
$ | 107 | $ | 101 | $ | 82 | $ | 290 | $ | 290 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|||||||||||||||||||
Effective tax rate (operating income) |
34.4 | % | 32.6 | % | 35.3 | % | 34.1 | % | 34.1 | % |
U.S. Life Insurance Segment | ||||||||||||||||||||
Twelve months ended December 31, 2011 |
Life Insurance | Long-Term Care | Fixed Annuities | Total U.S. Life Insurance Segment |
Total | |||||||||||||||
REVENUES: |
||||||||||||||||||||
Premiums |
$ | 864 | $ | 2,020 | $ | 95 | $ | 2,979 | $ | 2,979 | ||||||||||
Net investment income |
534 | 959 | 1,045 | 2,538 | 2,538 | |||||||||||||||
Net investment gains (losses) |
(32 | ) | 19 | (60 | ) | (73 | ) | (73 | ) | |||||||||||
Insurance and investment product fees and other |
676 | 4 | 6 | 686 | 686 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
2,042 | 3,002 | 1,086 | 6,130 | 6,130 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||
Benefits and other changes in policy reserves |
1,034 | 2,324 | 431 | 3,789 | 3,789 | |||||||||||||||
Interest credited |
255 | | 404 | 659 | 659 | |||||||||||||||
Acquisition and operating expenses, net of deferrals |
223 | 432 | 81 | 736 | 736 | |||||||||||||||
Amortization of deferred acquisition costs and intangibles |
132 | 80 | 85 | 297 | 297 | |||||||||||||||
Interest expense |
103 | 1 | | 104 | 104 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total benefits and expenses |
1,747 | 2,837 | 1,001 | 5,585 | 5,585 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME BEFORE INCOME TAXES |
295 | 165 | 85 | 545 | 545 | |||||||||||||||
Provision for income taxes |
105 | 54 | 30 | 189 | 189 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME |
190 | 111 | 55 | 356 | 356 | |||||||||||||||
ADJUSTMENT TO NET INCOME: |
||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
21 | (12 | ) | 23 | 32 | 32 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OPERATING INCOME |
$ | 211 | $ | 99 | $ | 78 | $ | 388 | $ | 388 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|||||||||||||||||||
Effective tax rate (operating income) |
35.6 | % | 32.4 | % | 35.0 | % | 34.7 | % | 34.7 | % |
19
U.S. Life Insurance Segment
20
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating IncomeU.S. Life Insurance Segment
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q |
3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 759 | $ | 754 | $ | 733 | $ | 543 | $ | 2,789 | $ | 758 | $ | 750 | $ | 738 | $ | 733 | $ | 2,979 | ||||||||||||||||||||
Net investment income |
661 | 644 | 651 | 638 | 2,594 | 632 | 637 | 648 | 621 | 2,538 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
8 | 7 | (21 | ) | (2 | ) | (8 | ) | | (19 | ) | (33 | ) | (21 | ) | (73 | ) | |||||||||||||||||||||||
Insurance and investment product fees and other |
199 | 221 | 192 | 263 | 875 | 176 | 192 | 172 | 146 | 686 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Total revenues |
1,627 | 1,626 | 1,555 | 1,442 | 6,250 | 1,566 | 1,560 | 1,525 | 1,479 | 6,130 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
1,075 | 1,051 | 1,038 | 786 | 3,950 | 968 | 964 | 942 | 915 | 3,789 | ||||||||||||||||||||||||||||||
Interest credited |
161 | 160 | 160 | 162 | 643 | 163 | 160 | 170 | 166 | 659 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
169 | 170 | 169 | 169 | 677 | 193 | 188 | 183 | 172 | 736 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
78 | 94 | 82 | 223 | 477 | 77 | 67 | 77 | 76 | 297 | ||||||||||||||||||||||||||||||
Interest expense |
26 | 24 | 24 | 12 | 86 | 26 | 27 | 25 | 26 | 104 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Total benefits and expenses |
1,509 | 1,499 | 1,473 | 1,352 | 5,833 | 1,427 | 1,406 | 1,397 | 1,355 | 5,585 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
118 | 127 | 82 | 90 | 417 | 139 | 154 | 128 | 124 | 545 | ||||||||||||||||||||||||||||||
Provision for income taxes |
40 | 42 | 29 | 32 | 143 | 48 | 50 | 47 | 44 | 189 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
NET INCOME |
78 | 85 | 53 | 58 | 274 | 91 | 104 | 81 | 80 | 356 | ||||||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME: |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(2 | ) | 1 | 11 | 6 | 16 | 3 | (2 | ) | 19 | 12 | 32 | ||||||||||||||||||||||||||||
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|||||||||||||||||||||
NET OPERATING INCOME |
$ | 76 | $ | 86 | $ | 64 | $ | 64 | $ | 290 | $ | 94 | $ | 102 | $ | 100 | $ | 92 | $ | 388 | ||||||||||||||||||||
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|||||||||||||||||||||||||||||||||||||||
Effective tax rate (operating income) |
32.7 | % | 32.4 | % | 36.1 | % | 35.6 | % | 34.1 | % | 34.9 | % | 32.3 | % | 36.5 | % | 35.2 | % | 34.7 | % |
21
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income and SalesU.S. Life Insurance SegmentLife Insurance
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q(1) | 2Q | 1Q(2) | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 177 | $ | 187 | $ | 189 | $ | (11 | ) | $ | 542 | $ | 205 | $ | 215 | $ | 222 | $ | 222 | $ | 864 | |||||||||||||||||||
Net investment income |
137 | 129 | 130 | 129 | 525 | 131 | 132 | 141 | 130 | 534 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
10 | (2 | ) | (9 | ) | (5 | ) | (6 | ) | (13 | ) | (4 | ) | (15 | ) | | (32 | ) | ||||||||||||||||||||||
Insurance and investment product fees and other |
198 | 219 | 188 | 260 | 865 | 174 | 189 | 170 | 143 | 676 | ||||||||||||||||||||||||||||||
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Total revenues |
522 | 533 | 498 | 373 | 1,926 | 497 | 532 | 518 | 495 | 2,042 | ||||||||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
264 | 313 | 281 | 65 | 923 | 260 | 258 | 254 | 262 | 1,034 | ||||||||||||||||||||||||||||||
Interest credited |
69 | 66 | 65 | 65 | 265 | 64 | 59 | 69 | 63 | 255 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
44 | 51 | 55 | 55 | 205 | 55 | 62 | 60 | 46 | 223 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
35 | 49 | 37 | 172 | 293 | 29 | 34 | 36 | 33 | 132 | ||||||||||||||||||||||||||||||
Interest expense |
25 | 24 | 23 | 12 | 84 | 26 | 26 | 25 | 26 | 103 | ||||||||||||||||||||||||||||||
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Total benefits and expenses |
437 | 503 | 461 | 369 | 1,770 | 434 | 439 | 444 | 430 | 1,747 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
85 | 30 | 37 | 4 | 156 | 63 | 93 | 74 | 65 | 295 | ||||||||||||||||||||||||||||||
Provision for income taxes |
30 | 10 | 13 | 1 | 54 | 24 | 31 | 27 | 23 | 105 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
NET INCOME |
55 | 20 | 24 | 3 | 102 | 39 | 62 | 47 | 42 | 190 | ||||||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME: |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(6 | ) | 2 | 6 | 3 | 5 | 9 | 2 | 10 | | 21 | |||||||||||||||||||||||||||||
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NET OPERATING INCOME |
$ | 49 | $ | 22 | $ | 30 | $ | 6 | $ | 107 | $ | 48 | $ | 64 | $ | 57 | $ | 42 | $ | 211 | ||||||||||||||||||||
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|||||||||||||||||||||||||||||||||||||||
Effective tax rate (operating income) |
34.9 | % | 32.8 | % | 35.7 | % | 30.3 | % | 34.4 | % | 37.8 | % | 33.1 | % | 37.0 | % | 35.0 | % | 35.6 | % | ||||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||||||
Sales by Product: |
||||||||||||||||||||||||||||||||||||||||
Term Life |
$ | | $ | 1 | $ | | $ | | $ | 1 | $ | | $ | 1 | $ | | $ | | $ | 1 | ||||||||||||||||||||
Term Universal Life |
11 | 19 | 32 | 31 | 93 | 31 | 33 | 35 | 30 | 129 | ||||||||||||||||||||||||||||||
Universal Life |
17 | 15 | 19 | 16 | 67 | 16 | 14 | 13 | 15 | 58 | ||||||||||||||||||||||||||||||
Linked-Benefits |
3 | 3 | 3 | 3 | 12 | 2 | 2 | 3 | 2 | 9 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total Sales |
$ | 31 | 38 | $ | 54 | $ | 50 | $ | 173 | $ | 49 | $ | 50 | $ | 51 | $ | 47 | $ | 197 | |||||||||||||||||||||
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Sales by Distribution Channel: |
||||||||||||||||||||||||||||||||||||||||
Financial Intermediaries |
$ | 1 | $ | 2 | $ | 1 | $ | 2 | $ | 6 | $ | 1 | $ | 2 | $ | 1 | $ | 2 | $ | 6 | ||||||||||||||||||||
Independent Producers |
30 | 35 | 52 | 48 | 165 | 47 | 48 | 49 | 45 | 189 | ||||||||||||||||||||||||||||||
Dedicated Sales Specialist |
| 1 | 1 | | 2 | 1 | | 1 | | 2 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Total Sales |
$ | 31 | $ | 38 | $ | 54 | $ | 50 | $ | 173 | $ | 49 | $ | 50 | $ | 51 | $ | 47 | $ | 197 | ||||||||||||||||||||
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|
|
(1) | In the third quarter of 2012, as part of a life block transaction, the company repurchased $270 million of non-recourse funding obligations resulting in a U.S. GAAP after-tax gain of approximately $21 million. The company also recorded higher after-tax deferred acquisition costs (DAC) amortization of approximately $25 million reflecting loss recognition associated with a third-party reinsurance treaty plus additional expenses. The combined transactions resulted in a U.S. GAAP after-tax loss of $6 million. |
(2) | In January 2012, as part of a life block transaction, the company repurchased $475 million of non-recourse funding obligations resulting in a U.S. GAAP after-tax gain of approximately $52 million and then ceded certain term life insurance policies to a third-party reinsurer resulting in a U.S. GAAP after-tax loss, net of DAC, of $93 million. The combined transactions resulted in a U.S. GAAP after-tax loss of approximately $41 million. |
22
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Life Insurance In-Force
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||||||||||||
Term and Whole Life Insurance |
||||||||||||||||||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 340,394 | $ | 382,735 | $ | 387,333 | $ | 391,870 | $ | 439,743 | $ | 444,861 | $ | 449,806 | $ | 454,704 | ||||||||||||||||
Life insurance in-force before reinsurance |
$ | 539,317 | $ | 546,829 | $ | 554,019 | $ | 561,186 | $ | 568,261 | $ | 575,689 | $ | 583,007 | $ | 590,569 | ||||||||||||||||
Term Universal Life Insurance |
||||||||||||||||||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 137,359 | $ | 133,846 | $ | 119,687 | $ | 112,906 | $ | 99,753 | $ | 87,238 | $ | 73,569 | $ | 58,371 | ||||||||||||||||
Life insurance in-force before reinsurance |
$ | 138,436 | $ | 134,921 | $ | 127,640 | $ | 113,737 | $ | 100,476 | $ | 87,896 | $ | 74,107 | $ | 58,811 | ||||||||||||||||
Universal Life Insurance |
||||||||||||||||||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 44,129 | $ | 43,523 | $ | 43,232 | $ | 42,734 | $ | 42,363 | $ | 42,015 | $ | 41,737 | $ | 41,543 | ||||||||||||||||
Life insurance in-force before reinsurance |
$ | 50,954 | $ | 50,364 | $ | 50,083 | $ | 49,527 | $ | 49,204 | $ | 48,199 | $ | 47,990 | $ | 47,831 | ||||||||||||||||
Total Life Insurance |
||||||||||||||||||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 521,882 | $ | 560,104 | $ | 550,252 | $ | 547,510 | $ | 581,859 | $ | 574,114 | $ | 565,112 | $ | 554,618 | ||||||||||||||||
Life insurance in-force before reinsurance |
$ | 728,707 | $ | 732,114 | $ | 731,742 | $ | 724,450 | $ | 717,941 | $ | 711,784 | $ | 705,104 | $ | 697,211 |
23
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income and SalesU.S. Life Insurance SegmentLong-Term Care
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 552 | $ | 541 | $ | 529 | $ | 521 | $ | 2,143 | $ | 520 | $ | 513 | $ | 496 | $ | 491 | $ | 2,020 | ||||||||||||||||||||
Net investment income |
273 | 266 | 266 | 255 | 1,060 | 246 | 244 | 240 | 229 | 959 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
1 | 1 | | (2 | ) | | 8 | 27 | (8 | ) | (8 | ) | 19 | |||||||||||||||||||||||||||
Insurance and investment product fees and other |
| 1 | 2 | 1 | 4 | 1 | 1 | 1 | 1 | 4 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Total revenues |
826 | 809 | 797 | 775 | 3,207 | 775 | 785 | 729 | 713 | 3,002 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
694 | 625 | 654 | 601 | 2,574 | 593 | 605 | 583 | 543 | 2,324 | ||||||||||||||||||||||||||||||
Interest credited |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
105 | 100 | 96 | 98 | 399 | 113 | 110 | 105 | 104 | 432 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
17 | 19 | 24 | 22 | 82 | 22 | 19 | 19 | 20 | 80 | ||||||||||||||||||||||||||||||
Interest expense |
1 | | 1 | | 2 | | 1 | | | 1 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Total benefits and expenses |
817 | 744 | 775 | 721 | 3,057 | 728 | 735 | 707 | 667 | 2,837 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
9 | 65 | 22 | 54 | 150 | 47 | 50 | 22 | 46 | 165 | ||||||||||||||||||||||||||||||
Provision for income taxes |
1 | 20 | 8 | 20 | 49 | 14 | 15 | 9 | 16 | 54 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
NET INCOME |
8 | 45 | 14 | 34 | 101 | 33 | 35 | 13 | 30 | 111 | ||||||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME: |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(1 | ) | | | 1 | | (5 | ) | (18 | ) | 5 | 6 | (12 | ) | ||||||||||||||||||||||||||
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|||||||||||||||||||||
NET OPERATING INCOME |
$ | 7 | $ | 45 | $ | 14 | $ | 35 | $ | 101 | $ | 28 | $ | 17 | $ | 18 | $ | 36 | $ | 99 | ||||||||||||||||||||
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|||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||
Effective tax rate (operating income) |
2.1 | % | 30.9 | % | 38.4 | % | 36.5 | % | 32.6 | % | 29.1 | % | 22.3 | % | 39.2 | % | 35.2 | % | 32.4 | % | ||||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||||||||||||||||||
Financial Intermediaries |
$ | 6 | $ | 5 | $ | 5 | $ | 5 | $ | 21 | $ | 6 | $ | 6 | $ | 5 | $ | 5 | $ | 22 | ||||||||||||||||||||
Independent Producers |
41 | 46 | 35 | 28 | 150 | 35 | 34 | 31 | 29 | 129 | ||||||||||||||||||||||||||||||
Dedicated Sales Specialist |
13 | 12 | 13 | 12 | 50 | 15 | 14 | 14 | 12 | 55 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total Individual Long-Term Care |
60 | 63 | 53 | 45 | 221 | 56 | 54 | 50 | 46 | 206 | ||||||||||||||||||||||||||||||
Group Long-Term Care |
4 | 6 | 7 | 3 | 20 | 9 | | 2 | 2 | 13 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total Sales |
$ | 64 | $ | 69 | $ | 60 | $ | 48 | $ | 241 | $ | 65 | $ | 54 | $ | 52 | $ | 48 | $ | 219 | ||||||||||||||||||||
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|
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|||||||||||||||||||||||||||||||||||||||
RATIOS: |
||||||||||||||||||||||||||||||||||||||||
Loss Ratio(1) |
76.2 | % | 65.8 | % | 74.2 | % | 66.4 | % | 70.7 | % | 67.1 | % | 71.4 | % | 70.4 | % | 64.5 | % | 68.4 | % | ||||||||||||||||||||
Gross Benefits Ratio(2) |
126.4 | % | 115.0 | % | 124.1 | % | 115.1 | % | 120.2 | % | 114.1 | % | 118.0 | % | 117.3 | % | 110.6 | % | 115.0 | % |
(1) | The loss ratio was calculated by dividing benefits and other changes in policy reserves less tabular interest on reserves less loss adjustment expenses by net earned premiums. |
(2) | The gross benefits ratio was calculated by dividing the benefits and other changes in policy reserves by net earned premiums. |
24
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income and SalesU.S. Life Insurance SegmentFixed Annuities
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 30 | $ | 26 | $ | 15 | $ | 33 | $ | 104 | $ | 33 | $ | 22 | $ | 20 | $ | 20 | $ | 95 | ||||||||||||||||||||
Net investment income |
251 | 249 | 255 | 254 | 1,009 | 255 | 261 | 267 | 262 | 1,045 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
(3 | ) | 8 | (12 | ) | 5 | (2 | ) | 5 | (42 | ) | (10 | ) | (13 | ) | (60 | ) | |||||||||||||||||||||||
Insurance and investment product fees and other |
1 | 1 | 2 | 2 | 6 | 1 | 2 | 1 | 2 | 6 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Total revenues |
279 | 284 | 260 | 294 | 1,117 | 294 | 243 | 278 | 271 | 1,086 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
117 | 113 | 103 | 120 | 453 | 115 | 101 | 105 | 110 | 431 | ||||||||||||||||||||||||||||||
Interest credited |
92 | 94 | 95 | 97 | 378 | 99 | 101 | 101 | 103 | 404 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
20 | 19 | 18 | 16 | 73 | 25 | 16 | 18 | 22 | 81 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
26 | 26 | 21 | 29 | 102 | 26 | 14 | 22 | 23 | 85 | ||||||||||||||||||||||||||||||
Interest expense |
| | | | | | | | | | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total benefits and expenses |
255 | 252 | 237 | 262 | 1,006 | 265 | 232 | 246 | 258 | 1,001 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
24 | 32 | 23 | 32 | 111 | 29 | 11 | 32 | 13 | 85 | ||||||||||||||||||||||||||||||
Provision for income taxes |
9 | 12 | 8 | 11 | 40 | 10 | 4 | 11 | 5 | 30 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
NET INCOME |
15 | 20 | 15 | 21 | 71 | 19 | 7 | 21 | 8 | 55 | ||||||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME: |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
5 | (1 | ) | 5 | 2 | 11 | (1 | ) | 14 | 4 | 6 | 23 | ||||||||||||||||||||||||||||
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|||||||||||||||||||||
NET OPERATING INCOME |
$ | 20 | $ | 19 | $ | 20 | $ | 23 | $ | 82 | $ | 18 | $ | 21 | $ | 25 | $ | 14 | $ | 78 | ||||||||||||||||||||
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|||||||||||||||||||||
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|||||||||||||||||||||||||||||||||||||||
Effective tax rate (operating income) |
35.1 | % | 35.4 | % | 35.3 | % | 35.6 | % | 35.3 | % | 35.0 | % | 36.9 | % | 33.1 | % | 35.6 | % | 35.0 | % | ||||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||||||
Sales by Product: |
||||||||||||||||||||||||||||||||||||||||
Single Premium Immediate Annuities |
$ | 69 | $ | 63 | $ | 51 | $ | 74 | $ | 257 | $ | 70 | $ | 49 | $ | 52 | $ | 57 | $ | 228 | ||||||||||||||||||||
Single Premium Deferred Annuities |
179 | 424 | 285 | 262 | 1,150 | 293 | 446 | 272 | 109 | 1,120 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total Sales |
$ | 248 | $ | 487 | $ | 336 | $ | 336 | $ | 1,407 | $ | 363 | $ | 495 | $ | 324 | $ | 166 | $ | 1,348 | ||||||||||||||||||||
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Sales by Distribution Channel: |
||||||||||||||||||||||||||||||||||||||||
Financial Intermediaries |
$ | 120 | $ | 336 | $ | 242 | $ | 216 | $ | 914 | $ | 233 | $ | 411 | $ | 243 | $ | 108 | $ | 995 | ||||||||||||||||||||
Independent Producers |
118 | 145 | 90 | 116 | 469 | 127 | 82 | 79 | 55 | 343 | ||||||||||||||||||||||||||||||
Dedicated Sales Specialists |
10 | 6 | 4 | 4 | 24 | 3 | 2 | 2 | 3 | 10 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total Sales |
$ | 248 | $ | 487 | $ | 336 | $ | 336 | $ | 1,407 | $ | 363 | $ | 495 | $ | 324 | $ | 166 | $ | 1,348 | ||||||||||||||||||||
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25
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Selected Operating Performance MeasuresU.S. Life Insurance SegmentFixed Annuities
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
Single Premium Deferred Annuities |
||||||||||||||||||||||||||||||||||||||||
Account value, beginning of the period |
$ | 11,104 | $ | 10,904 | $ | 10,849 | $ | 10,831 | $ | 10,831 | $ | 10,775 | $ | 10,582 | $ | 10,660 | $ | 10,819 | $ | 10,819 | ||||||||||||||||||||
Deposits |
184 | 427 | 286 | 264 | 1,161 | 295 | 450 | 275 | 120 | 1,140 | ||||||||||||||||||||||||||||||
Surrenders, benefits and product charges |
(331 | ) | (310 | ) | (314 | ) | (330 | ) | (1,285 | ) | (325 | ) | (345 | ) | (441 | ) | (368 | ) | (1,479 | ) | ||||||||||||||||||||
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Net flows |
(147 | ) | 117 | (28 | ) | (66 | ) | (124 | ) | (30 | ) | 105 | (166 | ) | (248 | ) | (339 | ) | ||||||||||||||||||||||
Interest credited |
81 | 83 | 83 | 84 | 331 | 86 | 88 | 88 | 89 | 351 | ||||||||||||||||||||||||||||||
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Account value, end of the period |
11,038 | 11,104 | 10,904 | 10,849 | 11,038 | 10,831 | 10,775 | 10,582 | 10,660 | 10,831 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Single Premium Immediate Annuities |
||||||||||||||||||||||||||||||||||||||||
Account value, beginning of the period |
6,469 | 6,427 | 6,404 | 6,433 | 6,433 | 6,482 | 6,384 | 6,411 | 6,528 | 6,528 | ||||||||||||||||||||||||||||||
Premiums and deposits |
93 | 90 | 81 | 106 | 370 | 96 | 77 | 85 | 85 | 343 | ||||||||||||||||||||||||||||||
Surrenders, benefits and product charges |
(235 | ) | (222 | ) | (235 | ) | (237 | ) | (929 | ) | (250 | ) | (245 | ) | (253 | ) | (256 | ) | (1,004 | ) | ||||||||||||||||||||
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Net flows |
(142 | ) | (132 | ) | (154 | ) | (131 | ) | (559 | ) | (154 | ) | (168 | ) | (168 | ) | (171 | ) | (661 | ) | ||||||||||||||||||||
Interest credited |
75 | 75 | 77 | 78 | 305 | 79 | 80 | 82 | 83 | 324 | ||||||||||||||||||||||||||||||
Effect of accumulated net unrealized investment gains (losses) |
40 | 99 | 100 | 24 | 263 | 26 | 186 | 59 | (29 | ) | 242 | |||||||||||||||||||||||||||||
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Account value, end of the period |
6,442 | 6,469 | 6,427 | 6,404 | 6,442 | 6,433 | 6,482 | 6,384 | 6,411 | 6,433 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Structured Settlements |
||||||||||||||||||||||||||||||||||||||||
Account value, net of reinsurance, beginning of the period |
1,104 | 1,106 | 1,107 | 1,107 | 1,107 | 1,109 | 1,113 | 1,113 | 1,113 | 1,113 | ||||||||||||||||||||||||||||||
Surrenders, benefits and product charges |
(17 | ) | (17 | ) | (16 | ) | (14 | ) | (64 | ) | (17 | ) | (18 | ) | (14 | ) | (15 | ) | (64 | ) | ||||||||||||||||||||
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|||||||||||||||||||||
Net flows |
(17 | ) | (17 | ) | (16 | ) | (14 | ) | (64 | ) | (17 | ) | (18 | ) | (14 | ) | (15 | ) | (64 | ) | ||||||||||||||||||||
Interest credited |
14 | 15 | 15 | 14 | 58 | 15 | 14 | 14 | 15 | 58 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Account value, net of reinsurance, end of the period |
1,101 | 1,104 | 1,106 | 1,107 | 1,101 | 1,107 | 1,109 | 1,113 | 1,113 | 1,107 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total Fixed Annuities |
$ | 18,581 | $ | 18,677 | $ | 18,437 | $ | 18,360 | $ | 18,581 | $ | 18,371 | $ | 18,366 | $ | 18,079 | $ | 18,184 | $ | 18,371 | ||||||||||||||||||||
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26
Global Mortgage Insurance Division
27
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income (Loss)Global Mortgage Insurance Division
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 393 | $ | 392 | $ | 393 | $ | 384 | $ | 1,562 | $ | 400 | $ | 413 | $ | 410 | $ | 404 | $ | 1,627 | ||||||||||||||||||||
Net investment income |
104 | 112 | 107 | 120 | 443 | 112 | 132 | 125 | 128 | 497 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
12 | | 11 | 29 | 52 | 43 | 34 | 6 | 5 | 88 | ||||||||||||||||||||||||||||||
Insurance and investment product fees and other |
2 | | 20 | 2 | 24 | 6 | | 6 | 2 | 14 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total revenues |
511 | 504 | 531 | 535 | 2,081 | 561 | 579 | 547 | 539 | 2,226 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
275 | 273 | 289 | 404 | 1,241 | 392 | 370 | 633 | 388 | 1,783 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
(91 | ) | 102 | 94 | 93 | 198 | 95 | 106 | 104 | 99 | 404 | |||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
15 | 18 | 18 | 18 | 69 | 16 | 17 | 19 | 19 | 71 | ||||||||||||||||||||||||||||||
Interest expense |
9 | 9 | 8 | 10 | 36 | 10 | 9 | 6 | 6 | 31 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total benefits and expenses |
208 | 402 | 409 | 525 | 1,544 | 513 | 502 | 762 | 512 | 2,289 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
303 | 102 | 122 | 10 | 537 | 48 | 77 | (215 | ) | 27 | (63 | ) | ||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
66 | 11 | 31 | (4 | ) | 104 | 1 | 29 | (78 | ) | (24 | ) | (72 | ) | ||||||||||||||||||||||||||
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|
|||||||||||||||||||||
NET INCOME (LOSS) |
237 | 91 | 91 | 14 | 433 | 47 | 48 | (137 | ) | 51 | 9 | |||||||||||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
98 | 36 | 33 | 33 | 200 | 33 | 36 | 36 | 34 | 139 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
139 | 55 | 58 | (19 | ) | 233 | 14 | 12 | (173 | ) | 17 | (130 | ) | |||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(8 | ) | 1 | (7 | ) | (17 | ) | (31 | ) | (27 | ) | (23 | ) | (4 | ) | (1 | ) | (55 | ) | |||||||||||||||||||||
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|||||||||||||||||||||
NET OPERATING INCOME (LOSS)(1) |
$ | 131 | $ | 56 | $ | 51 | $ | (36 | ) | $ | 202 | $ | (13 | ) | $ | (11 | ) | $ | (177 | ) | $ | 16 | $ | (185 | ) | |||||||||||||||
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|||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||
Effective tax rate (operating income (loss)) |
19.9 | % | -3.7 | % | 21.6 | % | 41.2 | % | 8.6 | % | 64.0 | % | -75.5 | % | 34.3 | % | 166.5 | % | 44.7 | % |
(1) | Net operating income (loss) adjusted for foreign exchange as compared to the prior year period for the Global Mortgage Insurance Division was $124 million and $203 million for the three and twelve months ended December 31, 2012, respectively. |
28
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income (Loss)Global Mortgage Insurance Division
(amounts in millions)
International Mortgage Insurance Segment | ||||||||||||||||||||||||
Three months ended December 31, 2012 |
Canada | Australia | Other Countries |
Total International Mortgage Insurance Segment |
U.S. Mortgage Insurance Segment |
Total | ||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 147 | $ | 101 | $ | 9 | $ | 257 | $ | 136 | $ | 393 | ||||||||||||
Net investment income |
47 | 44 | 1 | 92 | 12 | 104 | ||||||||||||||||||
Net investment gains (losses) |
1 | 1 | (1 | ) | 1 | 11 | 12 | |||||||||||||||||
Insurance and investment product fees and other |
| | 1 | 1 | 1 | 2 | ||||||||||||||||||
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|||||||||||||
Total revenues |
195 | 146 | 10 | 351 | 160 | 511 | ||||||||||||||||||
|
|
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|
|
|||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
46 | 37 | 12 | 95 | 180 | 275 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
(163 | ) | 27 | 9 | (127 | ) | 36 | (91 | ) | |||||||||||||||
Amortization of deferred acquisition costs and intangibles |
9 | 5 | | 14 | 1 | 15 | ||||||||||||||||||
Interest expense |
6 | 3 | | 9 | | 9 | ||||||||||||||||||
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|
|||||||||||||
Total benefits and expenses |
(102 | ) | 72 | 21 | (9 | ) | 217 | 208 | ||||||||||||||||
|
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|
|
|||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
297 | 74 | (11 | ) | 360 | (57 | ) | 303 | ||||||||||||||||
Provision (benefit) for income taxes |
84 | 12 | | 96 | (30 | ) | 66 | |||||||||||||||||
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|
|
|
|||||||||||||
NET INCOME (LOSS) |
213 | 62 | (11 | ) | 264 | (27 | ) | 237 | ||||||||||||||||
Less: net income attributable to noncontrolling interests |
98 | | | 98 | | 98 | ||||||||||||||||||
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|
|||||||||||||
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
115 | 62 | (11 | ) | 166 | (27 | ) | 139 | ||||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(1 | ) | | | (1 | ) | (7 | ) | (8 | ) | ||||||||||||||
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|
|||||||||||||
NET OPERATING INCOME (LOSS) |
$ | 114 | $ | 62 | $ | (11 | ) | $ | 165 | $ | (34 | ) | $ | 131 | ||||||||||
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|||||||||||||
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|
|||||||||||||||||||||||
Effective tax rate (operating income (loss)) |
31.6 | % | 16.5 | % | -5.6 | % | 28.5 | % | 49.2 | % | 19.9 | % | ||||||||||||
International Mortgage Insurance Segment | ||||||||||||||||||||||||
Three months ended December 31, 2011 |
Canada | Australia | Other Countries |
Total International Mortgage Insurance Segment |
U.S. Mortgage Insurance Segment |
Total | ||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 153 | $ | 96 | $ | 11 | $ | 260 | $ | 140 | $ | 400 | ||||||||||||
Net investment income |
47 | 46 | 3 | 96 | 16 | 112 | ||||||||||||||||||
Net investment gains (losses) |
| 2 | (1 | ) | 1 | 42 | 43 | |||||||||||||||||
Insurance and investment product fees and other |
| 1 | 2 | 3 | 3 | 6 | ||||||||||||||||||
|
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|
|||||||||||||
Total revenues |
200 | 145 | 15 | 360 | 201 | 561 | ||||||||||||||||||
|
|
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|
|
|||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
61 | 43 | 19 | 123 | 269 | 392 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
28 | 24 | 8 | 60 | 35 | 95 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
9 | 6 | | 15 | 1 | 16 | ||||||||||||||||||
Interest expense |
6 | 4 | | 10 | | 10 | ||||||||||||||||||
|
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|
|
|
|||||||||||||
Total benefits and expenses |
104 | 77 | 27 | 208 | 305 | 513 | ||||||||||||||||||
|
|
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|
|
|
|
|
|
|
|
|
|||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
96 | 68 | (12 | ) | 152 | (104 | ) | 48 | ||||||||||||||||
Provision (benefit) for income taxes |
23 | 13 | | 36 | (35 | ) | 1 | |||||||||||||||||
|
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|
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|
|
|
|
|
|||||||||||||
NET INCOME (LOSS) |
73 | 55 | (12 | ) | 116 | (69 | ) | 47 | ||||||||||||||||
Less: net income attributable to noncontrolling interests |
33 | | | 33 | | 33 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
40 | 55 | (12 | ) | 83 | (69 | ) | 14 | ||||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| (1 | ) | 1 | | (27 | ) | (27 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET OPERATING INCOME (LOSS) |
$ | 40 | $ | 54 | $ | (11 | ) | $ | 83 | $ | (96 | ) | $ | (13 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|||||||||||||||||||||||
Effective tax rate (operating income (loss)) |
23.3 | % | 18.7 | % | -1.5 | % | 23.2 | % | 33.9 | % | 64.0 | % |
29
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income (Loss)Global Mortgage Insurance Division
(amounts in millions)
International Mortgage Insurance Segment | ||||||||||||||||||||||||
Twelve months ended December 31, 2012 |
Canada | Australia | Other Countries |
Total International Mortgage Insurance Segment |
U.S. Mortgage Insurance Segment |
Total | ||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 587 | $ | 388 | $ | 41 | $ | 1,016 | $ | 546 | $ | 1,562 | ||||||||||||
Net investment income |
187 | 181 | 7 | 375 | 68 | 443 | ||||||||||||||||||
Net investment gains (losses) |
12 | (2 | ) | 6 | 16 | 36 | 52 | |||||||||||||||||
Insurance and investment product fees and other |
| | 1 | 1 | 23 | 24 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues |
786 | 567 | 55 | 1,408 | 673 | 2,081 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
193 | 274 | 49 | 516 | 725 | 1,241 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
(80 | ) | 99 | 36 | 55 | 143 | 198 | |||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
39 | 24 | 1 | 64 | 5 | 69 | ||||||||||||||||||
Interest expense |
23 | 13 | | 36 | | 36 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total benefits and expenses |
175 | 410 | 86 | 671 | 873 | 1,544 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
611 | 157 | (31 | ) | 737 | (200 | ) | 537 | ||||||||||||||||
Provision (benefit) for income taxes |
172 | 17 | (1 | ) | 188 | (84 | ) | 104 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME (LOSS) |
439 | 140 | (30 | ) | 549 | (116 | ) | 433 | ||||||||||||||||
Less: net income attributable to noncontrolling interests |
200 | | | 200 | | 200 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
239 | 140 | (30 | ) | 349 | (116 | ) | 233 | ||||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(5 | ) | 2 | (4 | ) | (7 | ) | (24 | ) | (31 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET OPERATING INCOME (LOSS) |
$ | 234 | $ | 142 | $ | (34 | ) | $ | 342 | $ | (140 | ) | $ | 202 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|||||||||||||||||||||||
Effective tax rate (operating income (loss)) |
29.9 | % | 11.3 | % | 8.8 | % | 25.1 | % | 40.7 | % | 8.6 | % | ||||||||||||
International Mortgage Insurance Segment | ||||||||||||||||||||||||
Twelve months ended December 31, 2011 |
Canada | Australia | Other Countries |
Total International Mortgage Insurance Segment |
U.S. Mortgage Insurance Segment |
Total | ||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||
Premiums |
$ | 619 | $ | 392 | $ | 52 | $ | 1,063 | $ | 564 | $ | 1,627 | ||||||||||||
Net investment income |
196 | 184 | 13 | 393 | 104 | 497 | ||||||||||||||||||
Net investment gains (losses) |
8 | 34 | | 42 | 46 | 88 | ||||||||||||||||||
Insurance and investment product fees and other |
| 2 | 7 | 9 | 5 | 14 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues |
823 | 612 | 72 | 1,507 | 719 | 2,226 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||
Benefits and other changes in policy reserves |
228 | 183 | 47 | 458 | 1,325 | 1,783 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
111 | 93 | 44 | 248 | 156 | 404 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
39 | 27 | | 66 | 5 | 71 | ||||||||||||||||||
Interest expense |
23 | 8 | | 31 | | 31 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total benefits and expenses |
401 | 311 | 91 | 803 | 1,486 | 2,289 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
422 | 301 | (19 | ) | 704 | (767 | ) | (63 | ) | |||||||||||||||
Provision (benefit) for income taxes |
121 | 83 | 8 | 212 | (284 | ) | (72 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME (LOSS) |
301 | 218 | (27 | ) | 492 | (483 | ) | 9 | ||||||||||||||||
Less: net income attributable to noncontrolling interests |
139 | | | 139 | | 139 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
162 | 218 | (27 | ) | 353 | (483 | ) | (130 | ) | |||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(3 | ) | (22 | ) | | (25 | ) | (30 | ) | (55 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET OPERATING INCOME (LOSS) |
$ | 159 | $ | 196 | $ | (27 | ) | $ | 328 | $ | (513 | ) | $ | (185 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|||||||||||||||||||||||
Effective tax rate (operating income (loss)) |
30.0 | % | 27.2 | % | -41.4 | % | 31.4 | % | 36.9 | % | 44.7 | % |
30
International Mortgage Insurance Segment
31
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating IncomeInternational Mortgage Insurance Segment
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 257 | $ | 256 | $ | 256 | $ | 247 | $ | 1,016 | $ | 260 | $ | 273 | $ | 268 | $ | 262 | $ | 1,063 | ||||||||||||||||||||
Net investment income |
92 | 92 | 94 | 97 | 375 | 96 | 103 | 99 | 95 | 393 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
1 | 2 | 11 | 2 | 16 | 1 | 32 | 5 | 4 | 42 | ||||||||||||||||||||||||||||||
Insurance and investment product fees and other |
1 | | | | 1 | 3 | | 5 | 1 | 9 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenues |
351 | 350 | 361 | 346 | 1,408 | 360 | 408 | 377 | 362 | 1,507 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
95 | 99 | 115 | 207 | 516 | 123 | 119 | 107 | 109 | 458 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
(127 | ) | 62 | 61 | 59 | 55 | 60 | 65 | 63 | 60 | 248 | |||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
14 | 17 | 16 | 17 | 64 | 15 | 16 | 18 | 17 | 66 | ||||||||||||||||||||||||||||||
Interest expense |
9 | 9 | 8 | 10 | 36 | 10 | 9 | 6 | 6 | 31 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total benefits and expenses |
(9 | ) | 187 | 200 | 293 | 671 | 208 | 209 | 194 | 192 | 803 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
360 | 163 | 161 | 53 | 737 | 152 | 199 | 183 | 170 | 704 | ||||||||||||||||||||||||||||||
Provision for income taxes |
96 | 34 | 45 | 13 | 188 | 36 | 74 | 66 | 36 | 212 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET INCOME |
264 | 129 | 116 | 40 | 549 | 116 | 125 | 117 | 134 | 492 | ||||||||||||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
98 | 36 | 33 | 33 | 200 | 33 | 36 | 36 | 34 | 139 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
166 | 93 | 83 | 7 | 349 | 83 | 89 | 81 | 100 | 353 | ||||||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(1 | ) | 1 | (7 | ) | | (7 | ) | | (21 | ) | (3 | ) | (1 | ) | (25 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET OPERATING INCOME(1) |
$ | 165 | $ | 94 | $ | 76 | $ | 7 | $ | 342 | $ | 83 | $ | 68 | $ | 78 | $ | 99 | $ | 328 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||
Effective tax rate (operating income) |
28.5 | % | 17.6 | % | 27.4 | % | 6.8 | % | 25.1 | % | 23.2 | % | 43.1 | % | 39.7 | % | 18.1 | % | 31.4 | % |
(1) | Net operating income adjusted for foreign exchange as compared to the prior year period for the International Mortgage Insurance segment was $158 million and $343 million for the three and twelve months ended December 31, 2012, respectively. |
32
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income and SalesInternational Mortgage Insurance SegmentCanada
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q(1) | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 147 | $ | 147 | $ | 148 | $ | 145 | $ | 587 | $ | 153 | $ | 153 | $ | 157 | $ | 156 | $ | 619 | ||||||||||||||||||||
Net investment income |
47 | 46 | 47 | 47 | 187 | 47 | 51 | 50 | 48 | 196 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
1 | 4 | 1 | 6 | 12 | | 3 | 2 | 3 | 8 | ||||||||||||||||||||||||||||||
Insurance and investment product fees and other |
| | | | | | | | | | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenues |
195 | 197 | 196 | 198 | 786 | 200 | 207 | 209 | 207 | 823 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
46 | 44 | 48 | 55 | 193 | 61 | 57 | 51 | 59 | 228 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
(163 | ) | 28 | 29 | 26 | (80 | ) | 28 | 27 | 29 | 27 | 111 | ||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
9 | 10 | 10 | 10 | 39 | 9 | 9 | 11 | 10 | 39 | ||||||||||||||||||||||||||||||
Interest expense |
6 | 6 | 5 | 6 | 23 | 6 | 5 | 6 | 6 | 23 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total benefits and expenses |
(102 | ) | 88 | 92 | 97 | 175 | 104 | 98 | 97 | 102 | 401 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
297 | 109 | 104 | 101 | 611 | 96 | 109 | 112 | 105 | 422 | ||||||||||||||||||||||||||||||
Provision for income taxes |
84 | 29 | 30 | 29 | 172 | 23 | 32 | 47 | 19 | 121 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET INCOME |
213 | 80 | 74 | 72 | 439 | 73 | 77 | 65 | 86 | 301 | ||||||||||||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
98 | 36 | 33 | 33 | 200 | 33 | 36 | 36 | 34 | 139 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
115 | 44 | 41 | 39 | 239 | 40 | 41 | 29 | 52 | 162 | ||||||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(1 | ) | (2 | ) | | (2 | ) | (5 | ) | | (1 | ) | (1 | ) | (1 | ) | (3 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET OPERATING INCOME(2) |
$ | 114 | $ | 42 | $ | 41 | $ | 37 | $ | 234 | $ | 40 | $ | 40 | $ | 28 | $ | 51 | $ | 159 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||
Effective tax rate (operating income) |
31.6 | % | 25.6 | % | 30.0 | % | 29.3 | % | 29.9 | % | 23.3 | % | 31.3 | % | 53.8 | % | 9.1 | % | 30.0 | % | ||||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||||||
New Insurance Written (NIW) |
||||||||||||||||||||||||||||||||||||||||
Flow |
$ | 4,400 | $ | 7,200 | $ | 5,700 | $ | 3,500 | $ | 20,800 | $ | 5,200 | $ | 6,800 | $ | 6,400 | $ | 4,400 | $ | 22,800 | ||||||||||||||||||||
Bulk |
4,100 | 2,600 | 13,100 | 500 | 20,300 | 1,000 | 600 | 1,500 | 1,100 | 4,200 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total Canada NIW(3) |
$ | 8,500 | $ | 9,800 | $ | 18,800 | $ | 4,000 | $ | 41,100 | $ | 6,200 | $ | 7,400 | $ | 7,900 | $ | 5,500 | $ | 27,000 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
(1) | Effective January 1, 2013, the Government Guarantee Agreement and all obligations under it, including the requirement for a government guarantee fund and payment of exit fees related to it, was terminated. As a result, in the fourth quarter of 2012, acquisition and operating expenses, net of deferrals, for the Canadian platform included a favorable adjustment of $186 million associated with the reversal of the accrued liability for exit fees. This adjustment impacted net income available to Genworth Financial, Inc.s common stockholders by $78 million, net of taxes, and net income attributable to noncontrolling interests by $58 million, net of taxes. |
(2) | Net operating income for the Canadian platform adjusted for foreign exchange as compared to the prior year period was $111 million and $235 million for the three and twelve months ended December 31, 2012, respectively. |
(3) | New insurance written for the Canadian platform adjusted for foreign exchange as compared to the prior year period was $8,300 million and $42,100 million for the three and twelve months ended December 31, 2012, respectively. |
33
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income (Loss) and SalesInternational Mortgage Insurance SegmentAustralia
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 101 | $ | 98 | $ | 98 | $ | 91 | $ | 388 | $ | 96 | $ | 105 | $ | 98 | $ | 93 | $ | 392 | ||||||||||||||||||||
Net investment income |
44 | 44 | 46 | 47 | 181 | 46 | 49 | 46 | 43 | 184 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
1 | (2 | ) | 4 | (5 | ) | (2 | ) | 2 | 30 | 2 | | 34 | |||||||||||||||||||||||||||
Insurance and investment product fees and other |
| | | | | 1 | | 1 | | 2 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenues |
146 | 140 | 148 | 133 | 567 | 145 | 184 | 147 | 136 | 612 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
37 | 46 | 53 | 138 | 274 | 43 | 51 | 47 | 42 | 183 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
27 | 26 | 23 | 23 | 99 | 24 | 26 | 22 | 21 | 93 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
5 | 6 | 6 | 7 | 24 | 6 | 7 | 7 | 7 | 27 | ||||||||||||||||||||||||||||||
Interest expense |
3 | 3 | 3 | 4 | 13 | 4 | 4 | | | 8 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Total benefits and expenses |
72 | 81 | 85 | 172 | 410 | 77 | 88 | 76 | 70 | 311 | ||||||||||||||||||||||||||||||
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INCOME (LOSS) BEFORE INCOME TAXES |
74 | 59 | 63 | (39 | ) | 157 | 68 | 96 | 71 | 66 | 301 | |||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
12 | 4 | 16 | (15 | ) | 17 | 13 | 40 | 16 | 14 | 83 | |||||||||||||||||||||||||||||
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NET INCOME (LOSS) |
62 | 55 | 47 | (24 | ) | 140 | 55 | 56 | 55 | 52 | 218 | |||||||||||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
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NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
62 | 55 | 47 | (24 | ) | 140 | 55 | 56 | 55 | 52 | 218 | |||||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
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Net investment (gains) losses, net of taxes and other adjustments |
| 2 | (3 | ) | 3 | 2 | (1 | ) | (20 | ) | (1 | ) | | (22 | ) | |||||||||||||||||||||||||
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NET OPERATING INCOME (LOSS)(1) |
$ | 62 | $ | 57 | $ | 44 | $ | (21 | ) | $ | 142 | $ | 54 | $ | 36 | $ | 54 | $ | 52 | $ | 196 | |||||||||||||||||||
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Effective tax rate (operating income (loss)) |
16.5 | % | 8.2 | % | 24.8 | % | 39.9 | % | 11.3 | % | 18.7 | % | 46.5 | % | 22.2 | % | 21.7 | % | 27.2 | % | ||||||||||||||||||||
SALES: |
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New Insurance Written (NIW) |
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Flow |
$ | 9,600 | $ | 8,800 | $ | 8,200 | $ | 7,700 | $ | 34,300 | $ | 7,900 | $ | 7,100 | $ | 6,700 | $ | 5,500 | $ | 27,200 | ||||||||||||||||||||
Bulk |
| | 300 | 300 | 600 | 1,100 | 100 | 2,300 | 1,000 | 4,500 | ||||||||||||||||||||||||||||||
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Total Australia NIW(2) |
$ | 9,600 | $ | 8,800 | $ | 8,500 | $ | 8,000 | $ | 34,900 | $ | 9,000 | $ | 7,200 | $ | 9,000 | $ | 6,500 | $ | 31,700 | ||||||||||||||||||||
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(1) | Net operating income for the Australian platform adjusted for foreign exchange as compared to the prior year period was $60 million and $145 million for the three and twelve months ended December 31, 2012, respectively. |
(2) | New insurance written for the Australian platform adjusted for foreign exchange as compared to the prior year period was $9,400 million and $34,900 million for the three and twelve months ended December 31, 2012, respectively. |
34
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Loss and SalesInternational Mortgage Insurance SegmentOther Countries
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
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Premiums |
$ | 9 | $ | 11 | $ | 10 | $ | 11 | $ | 41 | $ | 11 | $ | 15 | $ | 13 | $ | 13 | $ | 52 | ||||||||||||||||||||
Net investment income |
1 | 2 | 1 | 3 | 7 | 3 | 3 | 3 | 4 | 13 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
(1 | ) | | 6 | 1 | 6 | (1 | ) | (1 | ) | 1 | 1 | | |||||||||||||||||||||||||||
Insurance and investment product fees and other |
1 | | | | 1 | 2 | | 4 | 1 | 7 | ||||||||||||||||||||||||||||||
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Total revenues |
10 | 13 | 17 | 15 | 55 | 15 | 17 | 21 | 19 | 72 | ||||||||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
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Benefits and other changes in policy reserves |
12 | 9 | 14 | 14 | 49 | 19 | 11 | 9 | 8 | 47 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
9 | 8 | 9 | 10 | 36 | 8 | 12 | 12 | 12 | 44 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
| 1 | | | 1 | | | | | | ||||||||||||||||||||||||||||||
Interest expense |
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Total benefits and expenses |
21 | 18 | 23 | 24 | 86 | 27 | 23 | 21 | 20 | 91 | ||||||||||||||||||||||||||||||
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LOSS BEFORE INCOME TAXES |
(11 | ) | (5 | ) | (6 | ) | (9 | ) | (31 | ) | (12 | ) | (6 | ) | | (1 | ) | (19 | ) | |||||||||||||||||||||
Provision (benefit) for income taxes |
| 1 | (1 | ) | (1 | ) | (1 | ) | | 2 | 3 | 3 | 8 | |||||||||||||||||||||||||||
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NET LOSS |
(11 | ) | (6 | ) | (5 | ) | (8 | ) | (30 | ) | (12 | ) | (8 | ) | (3 | ) | (4 | ) | (27 | ) | ||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
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NET LOSS AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS |
(11 | ) | (6 | ) | (5 | ) | (8 | ) | (30 | ) | (12 | ) | (8 | ) | (3 | ) | (4 | ) | (27 | ) | ||||||||||||||||||||
ADJUSTMENT TO NET LOSS AVAILABLE TO GENWORTH FINANCIAL, INC.S COMMON STOCKHOLDERS: |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| 1 | (4 | ) | (1 | ) | (4 | ) | 1 | | (1 | ) | | | ||||||||||||||||||||||||||
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NET OPERATING LOSS(1) |
$ | (11 | ) | $ | (5 | ) | $ | (9 | ) | $ | (9 | ) | $ | (34 | ) | $ | (11 | ) | $ | (8 | ) | $ | (4 | ) | $ | (4 | ) | $ | (27 | ) | ||||||||||
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Effective tax rate (operating loss) |
-5.6 | % | -0.6 | % | 26.7 | % | 10.1 | % | 8.8 | % | -1.5 | % | -40.9 | % | NM | (3) | -113.4 | % | -41.4 | % | ||||||||||||||||||||
SALES: |
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New Insurance Written (NIW) |
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Flow |
$ | 500 | $ | 400 | $ | 500 | $ | 300 | $ | 1,700 | $ | 400 | $ | 500 | $ | 600 | $ | 500 | $ | 2,000 | ||||||||||||||||||||
Bulk |
| | | | | 300 | 300 | 300 | 200 | 1,100 | ||||||||||||||||||||||||||||||
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Total Other Countries NIW(2) |
$ | 500 | $ | 400 | $ | 500 | $ | 300 | $ | 1,700 | $ | 700 | $ | 800 | $ | 900 | $ | 700 | $ | 3,100 | ||||||||||||||||||||
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(1) | Net operating loss for the Other Countries platform adjusted for foreign exchange as compared to the prior year period was $(13) million and $(37) million for the three and twelve months ended December 31, 2012, respectively. |
(2) | New insurance written for the Other Countries platform adjusted for foreign exchange as compared to the prior year period was $500 million and $1,800 million for the three and twelve months ended December 31, 2012, respectively. |
(3) | NM is defined as not meaningful for percentages greater than 200%. |
35
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Selected Key Performance MeasuresInternational Mortgage Insurance Segment
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
Net Premiums Written |
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Canada |
$ | 118 | $ | 176 | $ | 175 | $ | 79 | $ | 548 | $ | 122 | $ | 164 | $ | 155 | $ | 101 | $ | 542 | ||||||||||||||||||||
Australia |
157 | 131 | 103 | 102 | 493 | 104 | 92 | 90 | 61 | 347 | ||||||||||||||||||||||||||||||
Other Countries(1) |
| 7 | 7 | 6 | 20 | 7 | 5 | 12 | 10 | 34 | ||||||||||||||||||||||||||||||
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Total International Net Premiums Written |
$ | 275 | $ | 314 | $ | 285 | $ | 187 | $ | 1,061 | $ | 233 | $ | 261 | $ | 257 | $ | 172 | $ | 923 | ||||||||||||||||||||
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Loss Ratio(2) |
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Canada |
31 | % | 30 | % | 32 | % | 38 | % | 33 | % | 40 | % | 36 | % | 33 | % | 38 | % | 37 | % | ||||||||||||||||||||
Australia |
36 | % | 47 | % | 54 | % | 154 | % | 70 | % | 46 | % | 48 | % | 48 | % | 45 | % | 47 | % | ||||||||||||||||||||
Other Countries |
133 | % | 97 | % | 129 | % | 128 | % | 122 | % | 165 | % | 85 | % | 59 | % | 62 | % | 91 | % | ||||||||||||||||||||
Total International Loss Ratio |
37 | % | 39 | % | 45 | % | 84 | % | 51 | % | 48 | % | 43 | % | 40 | % | 42 | % | 43 | % | ||||||||||||||||||||
GAAP Basis Expense Ratio(3) |
||||||||||||||||||||||||||||||||||||||||
Canada(4) |
-103 | % | 26 | % | 26 | % | 25 | % | -7 | % | 25 | % | 23 | % | 25 | % | 24 | % | 24 | % | ||||||||||||||||||||
Australia |
32 | % | 32 | % | 30 | % | 33 | % | 32 | % | 30 | % | 32 | % | 29 | % | 30 | % | 31 | % | ||||||||||||||||||||
Other Countries(1) |
103 | % | 85 | % | 82 | % | 94 | % | 90 | % | 68 | % | 88 | % | 94 | % | 87 | % | 85 | % | ||||||||||||||||||||
Total International GAAP Basis Expense Ratio(4) |
-43 | % | 30 | % | 30 | % | 31 | % | 12 | % | 29 | % | 30 | % | 30 | % | 29 | % | 30 | % | ||||||||||||||||||||
Adjusted Expense Ratio(5) |
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Canada(4) |
-130 | % | 21 | % | 22 | % | 46 | % | -7 | % | 31 | % | 22 | % | 25 | % | 37 | % | 28 | % | ||||||||||||||||||||
Australia |
21 | % | 24 | % | 29 | % | 29 | % | 25 | % | 28 | % | 37 | % | 32 | % | 46 | % | 34 | % | ||||||||||||||||||||
Other Countries(1) |
NM | (6) | 118 | % | 131 | % | 162 | % | 185 | % | 108 | % | 258 | % | 108 | % | 114 | % | 129 | % | ||||||||||||||||||||
Total International Adjusted Expense Ratio(4) |
-41 | % | 25 | % | 27 | % | 41 | % | 11 | % | 32 | % | 31 | % | 32 | % | 45 | % | 34 | % | ||||||||||||||||||||
Primary Insurance In-Force |
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Canada |
$ | 303,400 | $ | 299,600 | $ | 281,700 | $ | 269,100 | $ | 261,300 | $ | 250,200 | $ | 264,700 | $ | 256,700 | ||||||||||||||||||||||||
Australia |
295,600 | 291,500 | 286,200 | 287,100 | 281,500 | 264,300 | 296,200 | 284,600 | ||||||||||||||||||||||||||||||||
Other Countries |
32,200 | 31,900 | 31,400 | 33,600 | 32,600 | 33,600 | 37,000 | 36,200 | ||||||||||||||||||||||||||||||||
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Total International Primary Insurance In-Force |
$ | 631,200 | $ | 623,000 | $ | 599,300 | $ | 589,800 | $ | 575,400 | $ | 548,100 | $ | 597,900 | $ | 577,500 | ||||||||||||||||||||||||
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Primary Risk In-Force(7) |
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Canada |
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Flow |
$ | 81,900 | $ | 81,300 | $ | 76,600 | $ | 76,200 | $ | 74,000 | $ | 70,600 | $ | 74,400 | $ | 72,200 | ||||||||||||||||||||||||
Bulk |
24,300 | 23,500 | 22,000 | 18,000 | 17,500 | 16,900 | 18,200 | 17,700 | ||||||||||||||||||||||||||||||||
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Total Canada |
106,200 | 104,800 | 98,600 | 94,200 | 91,500 | 87,500 | 92,600 | 89,900 | ||||||||||||||||||||||||||||||||
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Australia |
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Flow |
94,800 | 93,100 | 90,600 | 90,600 | 88,700 | 83,300 | 93,200 | 90,000 | ||||||||||||||||||||||||||||||||
Bulk |
8,700 | 9,000 | 9,600 | 9,900 | 9,800 | 9,200 | 10,500 | 9,600 | ||||||||||||||||||||||||||||||||
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Total Australia |
103,500 | 102,100 | 100,200 | 100,500 | 98,500 | 92,500 | 103,700 | 99,600 | ||||||||||||||||||||||||||||||||
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Other Countries |
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Flow(1) |
4,000 | 3,900 | 3,900 | 4,200 | 4,100 | 4,400 | 4,800 | 4,700 | ||||||||||||||||||||||||||||||||
Bulk |
300 | 400 | 400 | 400 | 400 | 400 | 500 | 500 | ||||||||||||||||||||||||||||||||
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Total Other Countries |
4,300 | 4,300 | 4,300 | 4,600 | 4,500 | 4,800 | 5,300 | 5,200 | ||||||||||||||||||||||||||||||||
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Total International Primary Risk In-Force |
$ | 214,000 | $ | 211,200 | $ | 203,100 | $ | 199,300 | $ | 194,500 | $ | 184,800 | $ | 201,600 | $ | 194,700 | ||||||||||||||||||||||||
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The loss and expense ratios included above were calculated using whole dollars and may be different than the ratios calculated using the rounded numbers included herein.
(1) | Includes the impact of settlements and cancelled insurance contracts, primarily with lenders in Europe. Primary flow risk in-force excludes $213 million, $183 million, $154 million, $134 million, $114 million and $92 million of risk in-force in Europe ceded under quota share reinsurance agreements as of December 31, 2012, September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011 and September 30, 2011, respectively. |
(2) | The ratio of incurred losses and loss adjustment expense to net earned premiums. In determining the pricing of the mortgage insurance products, the company develops a pricing loss ratio which uses industry and company loss experience over a number of years, which incorporate both favorable and unfavorable economic environments, differing coverage levels and varying capital requirements. Actual results may vary from pricing loss ratios for a number of reasons, which include differing economic conditions and actual individual product and lender performance. New business pricing loss ratios for the international businesses were as follows for all periods: Canada 35%-40%, Australia 25%-35% and Europe 40%-45%. |
(3) | The ratio of an insurers general expenses to net earned premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. |
(4) | Effective January 1, 2013, the Government Guarantee Agreement and all obligations under it, including the requirement for a government guarantee fund and payment of exit fees related to it, was terminated. As a result, in the fourth quarter of 2012, acquisition and operating expenses, net of deferrals, for the Canadian platform included a favorable adjustment of $186 million associated with the reversal of the accrued liability for exit fees. For the three and twelve months ended December 31, 2012, excluding the exit fee adjustment, the GAAP basis expense ratios for the Canadian platform were 22% and 25%, respectively, and the adjusted expense ratios for the Canadian platform were 28% and 27%, respectively. For the three and twelve months ended December 31, 2012, excluding the exit fee adjustment, the GAAP basis expense ratios for the International Mortgage Insurance segment were 29% and 30%, respectively, and the adjusted expense ratios for the International Mortgage Insurance segment were 27% and 29%, respectively. |
(5) | The ratio of an insurers general expenses to net premiums written. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. |
(6) | NM is defined as not meaningful for percentages greater than 200%. |
(7) | The businesses in Australia and Canada currently provide 100% coverage on the majority of the loans the company insures in those markets. For the purpose of representing the risk in-force, the company has computed an effective risk in-force amount which recognizes that the loss on any particular loan will be reduced by the net proceeds received upon sale of the property. Effective risk in-force has been calculated by applying to insurance in-force a factor that represents the highest expected average per-claim payment for any one underwriting year over the life of the businesses in Australia and Canada. This factor was 35% for all periods presented. |
36
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Selected Key Performance MeasuresInternational Mortgage Insurance SegmentCanada
(dollar amounts in millions)
Primary Insurance |
December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | |||||||||||||||||||
Insured loans in-force |
1,502,858 | 1,483,111 | 1,452,408 | 1,371,140 | 1,362,092 | |||||||||||||||||||
Insured delinquent loans |
2,153 | 2,183 | 2,408 | 2,623 | 2,752 | |||||||||||||||||||
Insured delinquency rate |
0.14 | % | 0.15 | % | 0.17 | % | 0.19 | % | 0.20 | % | ||||||||||||||
Flow loans in-force |
1,126,468 | 1,112,910 | 1,091,543 | 1,074,281 | 1,064,942 | |||||||||||||||||||
Flow delinquent loans |
1,924 | 1,943 | 2,125 | 2,335 | 2,477 | |||||||||||||||||||
Flow delinquency rate |
0.17 | % | 0.17 | % | 0.19 | % | 0.22 | % | 0.23 | % | ||||||||||||||
Bulk loans in-force |
376,390 | 370,201 | 360,865 | 296,859 | 297,150 | |||||||||||||||||||
Bulk delinquent loans |
229 | 240 | 283 | 288 | 275 | |||||||||||||||||||
Bulk delinquency rate |
0.06 | % | 0.06 | % | 0.08 | % | 0.10 | % | 0.09 | % | ||||||||||||||
Loss Metrics |
December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | |||||||||||||||||||
Beginning Reserves |
$ | 136 | $ | 141 | $ | 149 | $ | 161 | $ | 142 | ||||||||||||||
Paid claims(1) |
(52 | ) | (54 | ) | (54 | ) | (62 | ) | (64 | ) | ||||||||||||||
Increase in reserves |
40 | 44 | 48 | 55 | 82 | |||||||||||||||||||
Impact of changes in foreign exchange rates |
6 | 5 | (2 | ) | (5 | ) | 1 | |||||||||||||||||
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|||||||||||||||
Ending Reserves |
$ | 130 | $ | 136 | $ | 141 | $ | 149 | $ | 161 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
December 31, 2012 | September 30, 2012 | December 31, 2011 | ||||||||||||||||||||||
Province and Territory |
% of Primary Risk In-Force |
Primary Delinquency Rate |
% of Primary Risk In-Force |
Primary Delinquency Rate |
% of Primary Risk In-Force |
Primary Delinquency Rate |
||||||||||||||||||
Ontario |
46 | % | 0.09 | % | 46 | % | 0.09 | % | 46 | % | 0.12 | % | ||||||||||||
British Columbia |
16 | 0.18 | % | 16 | 0.18 | % | 16 | 0.28 | % | |||||||||||||||
Alberta |
16 | 0.22 | % | 16 | 0.24 | % | 16 | 0.40 | % | |||||||||||||||
Quebec |
14 | 0.19 | % | 14 | 0.20 | % | 15 | 0.22 | % | |||||||||||||||
Nova Scotia |
2 | 0.20 | % | 2 | 0.18 | % | 2 | 0.23 | % | |||||||||||||||
Saskatchewan |
2 | 0.11 | % | 2 | 0.13 | % | 2 | 0.14 | % | |||||||||||||||
Manitoba |
2 | 0.07 | % | 2 | 0.07 | % | 1 | 0.08 | % | |||||||||||||||
New Brunswick |
1 | 0.21 | % | 1 | 0.22 | % | 1 | 0.29 | % | |||||||||||||||
All Other |
1 | 0.09 | % | 1 | 0.12 | % | 1 | 0.09 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
100 | % | 0.14 | % | 100 | % | 0.15 | % | 100 | % | 0.20 | % | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
By Policy Year |
||||||||||||||||||||||||
2004 and prior |
22 | % | 0.03 | % | 23 | % | 0.03 | % | 25 | % | 0.04 | % | ||||||||||||
2005 |
7 | 0.09 | % | 7 | 0.08 | % | 8 | 0.13 | % | |||||||||||||||
2006 |
8 | 0.16 | % | 8 | 0.18 | % | 9 | 0.25 | % | |||||||||||||||
2007 |
16 | 0.24 | % | 16 | 0.26 | % | 18 | 0.38 | % | |||||||||||||||
2008 |
9 | 0.31 | % | 10 | 0.35 | % | 11 | 0.52 | % | |||||||||||||||
2009 |
6 | 0.29 | % | 6 | 0.30 | % | 7 | 0.34 | % | |||||||||||||||
2010 |
9 | 0.29 | % | 10 | 0.27 | % | 11 | 0.20 | % | |||||||||||||||
2011 |
9 | 0.18 | % | 9 | 0.14 | % | 11 | 0.05 | % | |||||||||||||||
2012 |
14 | 0.02 | % | 11 | 0.01 | % | | | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
100 | % | 0.14 | % | 100 | % | 0.15 | % | 100 | % | 0.20 | % | ||||||||||||
|
|
|
|
|
|
(1) | Paid claims exclude adjustments for expected recoveries related to loss reserves. |
37
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Selected Key Performance MeasuresInternational Mortgage Insurance SegmentCanada
(Canadian dollar amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
Paid Claims(1) |
||||||||||||||||||||||||||||||||||||||||
Flow |
$ | 49 | $ | 52 | $ | 52 | $ | 62 | $ | 215 | $ | 62 | $ | 70 | $ | 75 | $ | 64 | $ | 271 | ||||||||||||||||||||
Bulk |
2 | 2 | 2 | 2 | 8 | 3 | 2 | 2 | 1 | 8 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total Paid Claims |
$ | 51 | $ | 54 | $ | 54 | $ | 64 | $ | 223 | $ | 65 | $ | 72 | $ | 77 | $ | 65 | $ | 279 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Average Paid Claim (in thousands) |
$ | 84.6 | $ | 80.9 | $ | 76.7 | $ | 73.0 | $ | 80.6 | $ | 80.5 | $ | 82.3 | $ | 77.0 | ||||||||||||||||||||||||
Average Reserve Per Delinquency (in thousands) |
$ | 60.1 | $ | 61.1 | $ | 59.4 | $ | 56.6 | $ | 57.7 | $ | 51.5 | $ | 51.0 | $ | 56.2 | ||||||||||||||||||||||||
Loss Metrics |
||||||||||||||||||||||||||||||||||||||||
Beginning Reserves |
$ | 134 | $ | 143 | $ | 148 | $ | 164 | $ | 148 | $ | 167 | $ | 194 | $ | 200 | ||||||||||||||||||||||||
Paid claims |
(51 | ) | (54 | ) | (54 | ) | (64 | ) | (65 | ) | (72 | ) | (77 | ) | (65 | ) | ||||||||||||||||||||||||
Increase in reserves |
46 | 45 | 49 | 48 | 81 | 53 | 50 | 59 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Ending Reserves |
$ | 129 | $ | 134 | $ | 143 | $ | 148 | $ | 164 | $ | 148 | $ | 167 | $ | 194 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Loan Amount |
||||||||||||||||||||||||||||||||||||||||
Over $550K |
5 | % | 5 | % | 5 | % | 5 | % | 4 | % | 4 | % | 4 | % | 4 | % | ||||||||||||||||||||||||
$400K to $550K |
9 | 9 | 9 | 8 | 8 | 8 | 8 | 8 | ||||||||||||||||||||||||||||||||
$250K to $400K |
31 | 30 | 30 | 30 | 30 | 30 | 29 | 29 | ||||||||||||||||||||||||||||||||
$100K to $250K |
49 | 50 | 50 | 51 | 52 | 52 | 52 | 52 | ||||||||||||||||||||||||||||||||
$100K or Less |
6 | 6 | 6 | 6 | 6 | 6 | 7 | 7 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Average Primary Loan Size (in thousands) |
$ | 201 | $ | 199 | $ | 197 | $ | 196 | $ | 195 | $ | 194 | $ | 192 | $ | 191 | ||||||||||||||||||||||||
Average Effective Loan-To-Value Ratios By Policy Year(2) |
||||||||||||||||||||||||||||||||||||||||
2006 and prior |
40 | % | 40 | % | 41 | % | 42 | % | 44 | % | ||||||||||||||||||||||||||||||
2007 |
68 | % | 69 | % | 69 | % | 71 | % | 72 | % | ||||||||||||||||||||||||||||||
2008 |
73 | % | 73 | % | 74 | % | 76 | % | 76 | % | ||||||||||||||||||||||||||||||
2009 |
75 | % | 75 | % | 76 | % | 78 | % | 79 | % | ||||||||||||||||||||||||||||||
2010 |
82 | % | 82 | % | 83 | % | 85 | % | 86 | % | ||||||||||||||||||||||||||||||
2011 |
88 | % | 88 | % | 88 | % | 91 | % | 91 | % | ||||||||||||||||||||||||||||||
2012 |
92 | % | 91 | % | 91 | % | | % | | % | ||||||||||||||||||||||||||||||
Total Flow |
56 | % | 56 | % | 56 | % | 57 | % | 58 | % | ||||||||||||||||||||||||||||||
Total Bulk |
29 | % | 29 | % | 26 | % | 28 | % | 29 | % | ||||||||||||||||||||||||||||||
Total |
50 | % | 50 | % | 50 | % | 51 | % | 52 | % |
All amounts presented in Canadian dollars.
(1) | Paid claims exclude adjustments for expected recoveries related to loss reserves. |
(2) | Loan amounts (including capitalized premiums) reflect interest rates at time of loan origination and estimated scheduled principal repayments since loan origination. Home price estimates based on regional home price appreciation/depreciation data from the Canadian Real Estate Association. All data used in the effective loan-to-value ratio calculation reflects conditions as of the end of the previous quarter. |
38
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Selected Key Performance MeasuresInternational Mortgage Insurance SegmentAustralia
(dollar amounts in millions)
Primary Insurance |
December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | |||||||||||||||||||
Insured loans in-force |
1,440,719 | 1,440,397 | 1,449,648 | 1,442,867 | 1,437,380 | |||||||||||||||||||
Insured delinquent loans |
5,851 | 6,791 | 7,527 | 7,837 | 7,874 | |||||||||||||||||||
Insured delinquency rate |
0.41 | % | 0.47 | % | 0.52 | % | 0.54 | % | 0.55 | % | ||||||||||||||
Flow loans in-force |
1,311,052 | 1,306,316 | 1,304,944 | 1,295,907 | 1,289,200 | |||||||||||||||||||
Flow delinquent loans |
5,567 | 6,475 | 7,253 | 7,559 | 7,626 | |||||||||||||||||||
Flow delinquency rate |
0.42 | % | 0.50 | % | 0.56 | % | 0.58 | % | 0.59 | % | ||||||||||||||
Bulk loans in-force |
129,667 | 134,081 | 144,704 | 146,960 | 148,180 | |||||||||||||||||||
Bulk delinquent loans |
284 | 316 | 274 | 278 | 248 | |||||||||||||||||||
Bulk delinquency rate |
0.22 | % | 0.24 | % | 0.19 | % | 0.19 | % | 0.17 | % | ||||||||||||||
Loss Metrics |
December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | |||||||||||||||||||
Beginning Reserves |
$ | 287 | $ | 320 | $ | 342 | $ | 272 | $ | 247 | ||||||||||||||
Paid claims |
(73 | ) | (83 | ) | (72 | ) | (69 | ) | (32 | ) | ||||||||||||||
Increase in reserves |
37 | 46 | 53 | 138 | 44 | |||||||||||||||||||
Impact of changes in foreign exchange rates |
| 4 | (3 | ) | 1 | 13 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Ending Reserves |
$ | 251 | $ | 287 | $ | 320 | $ | 342 | $ | 272 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
December 31, 2012 | September 30, 2012 | December 31, 2011 | ||||||||||||||||||||||
State and Territory |
% of Primary Risk In-Force |
Primary Delinquency Rate |
% of Primary Risk In-Force |
Primary Delinquency Rate |
% of Primary Risk In-Force |
Primary Delinquency Rate |
||||||||||||||||||
New South Wales |
30 | % | 0.39 | % | 30 | % | 0.45 | % | 31 | % | 0.55 | % | ||||||||||||
Victoria |
23 | 0.31 | % | 23 | 0.34 | % | 23 | 0.37 | % | |||||||||||||||
Queensland |
23 | 0.57 | % | 23 | 0.69 | % | 22 | 0.81 | % | |||||||||||||||
Western Australia |
11 | 0.38 | % | 11 | 0.46 | % | 11 | 0.56 | % | |||||||||||||||
South Australia |
6 | 0.46 | % | 6 | 0.51 | % | 6 | 0.51 | % | |||||||||||||||
New Zealand |
2 | 0.55 | % | 2 | 0.64 | % | 2 | 0.93 | % | |||||||||||||||
Australian Capital Territory |
2 | 0.08 | % | 2 | 0.11 | % | 2 | 0.10 | % | |||||||||||||||
Tasmania |
2 | 0.39 | % | 2 | 0.41 | % | 2 | 0.38 | % | |||||||||||||||
Northern Territory |
1 | 0.15 | % | 1 | 0.18 | % | 1 | 0.25 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
100 | % | 0.41 | % | 100 | % | 0.47 | % | 100 | % | 0.55 | % | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
By Policy Year |
||||||||||||||||||||||||
2004 and prior |
22 | % | 0.12 | % | 23 | % | 0.13 | % | 25 | % | 0.14 | % | ||||||||||||
2005 |
7 | 0.43 | % | 7 | 0.52 | % | 8 | 0.54 | % | |||||||||||||||
2006 |
9 | 0.65 | % | 10 | 0.72 | % | 11 | 0.81 | % | |||||||||||||||
2007 |
10 | 0.87 | % | 11 | 0.96 | % | 12 | 1.18 | % | |||||||||||||||
2008 |
10 | 1.01 | % | 10 | 1.19 | % | 12 | 1.40 | % | |||||||||||||||
2009 |
12 | 0.69 | % | 12 | 0.80 | % | 13 | 0.80 | % | |||||||||||||||
2010 |
9 | 0.32 | % | 9 | 0.34 | % | 9 | 0.21 | % | |||||||||||||||
2011 |
9 | 0.16 | % | 9 | 0.15 | % | 10 | 0.03 | % | |||||||||||||||
2012 |
12 | 0.02 | % | 9 | 0.02 | % | | | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
100 | % | 0.41 | % | 100 | % | 0.47 | % | 100 | % | 0.55 | % | ||||||||||||
|
|
|
|
|
|
39
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Selected Key Performance MeasuresInternational Mortgage Insurance SegmentAustralia
(Australian dollar amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
Paid Claims |
||||||||||||||||||||||||||||||||||||||||
Flow |
$ | 70 | $ | 79 | $ | 70 | $ | 66 | $ | 285 | $ | 30 | $ | 25 | $ | 29 | $ | 26 | $ | 110 | ||||||||||||||||||||
Bulk |
1 | 1 | | | 2 | 1 | | 1 | | 2 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total Paid Claims |
$ | 71 | $ | 80 | $ | 70 | $ | 66 | $ | 287 | $ | 31 | $ | 25 | $ | 30 | $ | 26 | $ | 112 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Average Paid Claim (in thousands) |
$ | 80.9 | $ | 83.5 | $ | 91.2 | $ | 77.1 | $ | 64.6 | $ | 62.4 | $ | 75.9 | $ | 71.2 | ||||||||||||||||||||||||
Average Reserve Per Delinquency (in thousands) |
$ | 41.2 | $ | 40.8 | $ | 41.5 | $ | 42.2 | $ | 33.7 | $ | 30.0 | $ | 28.2 | $ | 28.5 | ||||||||||||||||||||||||
Loss Metrics |
||||||||||||||||||||||||||||||||||||||||
Beginning Reserves |
$ | 277 | $ | 312 | $ | 331 | $ | 266 | $ | 255 | $ | 232 | $ | 216 | $ | 201 | ||||||||||||||||||||||||
Paid claims |
(71 | ) | (80 | ) | (70 | ) | (66 | ) | (31 | ) | (25 | ) | (30 | ) | (26 | ) | ||||||||||||||||||||||||
Increase in reserves |
35 | 45 | 51 | 131 | 42 | 48 | 46 | 41 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Ending Reserves |
$ | 241 | $ | 277 | $ | 312 | $ | 331 | $ | 266 | $ | 255 | $ | 232 | $ | 216 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Loan Amount |
||||||||||||||||||||||||||||||||||||||||
Over $550K |
12 | % | 11 | % | 11 | % | 11 | % | 11 | % | 11 | % | 11 | % | 11 | % | ||||||||||||||||||||||||
$400K to $550K |
16 | 16 | 16 | 15 | 15 | 15 | 14 | 14 | ||||||||||||||||||||||||||||||||
$250K to $400K |
37 | 37 | 36 | 36 | 36 | 36 | 36 | 36 | ||||||||||||||||||||||||||||||||
$100K to $250K |
29 | 30 | 30 | 31 | 31 | 31 | 32 | 32 | ||||||||||||||||||||||||||||||||
$100K or Less |
6 | 6 | 7 | 7 | 7 | 7 | 7 | 7 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Average Primary Loan Size (in thousands) |
$ | 197 | $ | 195 | $ | 193 | $ | 192 | $ | 191 | $ | 191 | $ | 190 | $ | 189 | ||||||||||||||||||||||||
Average Effective Loan-To-Value Ratios By Policy Year(1) |
||||||||||||||||||||||||||||||||||||||||
2006 and prior |
48 | % | 49 | % | 49 | % | 48 | % | 49 | % | ||||||||||||||||||||||||||||||
2007 |
68 | % | 69 | % | 69 | % | 67 | % | 68 | % | ||||||||||||||||||||||||||||||
2008 |
76 | % | 77 | % | 77 | % | 74 | % | 74 | % | ||||||||||||||||||||||||||||||
2009 |
79 | % | 80 | % | 80 | % | 78 | % | 79 | % | ||||||||||||||||||||||||||||||
2010 |
85 | % | 86 | % | 86 | % | 85 | % | 85 | % | ||||||||||||||||||||||||||||||
2011 |
87 | % | 88 | % | 88 | % | 86 | % | 86 | % | ||||||||||||||||||||||||||||||
2012 |
85 | % | 86 | % | 86 | % | | % | | % | ||||||||||||||||||||||||||||||
Total Flow |
68 | % | 68 | % | 68 | % | 66 | % | 66 | % | ||||||||||||||||||||||||||||||
Total Bulk |
38 | % | 38 | % | 38 | % | 38 | % | 37 | % | ||||||||||||||||||||||||||||||
Total |
65 | % | 65 | % | 65 | % | 63 | % | 62 | % |
All amounts presented in Australian dollars.
(1) | Loan amounts (including capitalized premiums) reflect interest rates at time of loan origination and estimated scheduled principal repayments since loan origination. Home price estimates based on regional home price appreciation/depreciation data from RP Data (except Tasmania which is from the Australian Bureau of Statistics prior to 2Q12). All data used in the effective loan-to-value ratio calculation reflects conditions as of the end of the previous quarter. Effective loan-to-value ratios exclude New Zealand and inward reinsurance policies. |
40
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Selected Key Performance MeasuresInternational Mortgage Insurance Segment
(amounts in millions)
Risk In-Force by Loan-To-Value Ratio(1) |
December 31, 2012 | September 30, 2012 | ||||||||||||||||||||||
Primary | Flow | Bulk | Primary | Flow | Bulk | |||||||||||||||||||
Canada |
||||||||||||||||||||||||
95.01% and above |
$ | 36,229 | $ | 36,229 | $ | | $ | 35,760 | $ | 35,760 | $ | | ||||||||||||
90.01% to 95.00% |
25,868 | 25,865 | 3 | 25,825 | 25,822 | 3 | ||||||||||||||||||
80.01% to 90.00% |
19,226 | 16,685 | 2,541 | 18,911 | 16,681 | 2,229 | ||||||||||||||||||
80.00% and below |
24,856 | 3,078 | 21,779 | 24,353 | 3,056 | 21,297 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Canada |
$ | 106,179 | $ | 81,856 | $ | 24,322 | $ | 104,849 | $ | 81,319 | $ | 23,529 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Australia |
||||||||||||||||||||||||
95.01% and above |
$ | 18,930 | $ | 18,929 | $ | 1 | $ | 18,192 | $ | 18,191 | $ | 1 | ||||||||||||
90.01% to 95.00% |
23,348 | 23,340 | 8 | 22,536 | 22,528 | 8 | ||||||||||||||||||
80.01% to 90.00% |
26,651 | 26,562 | 89 | 26,306 | 26,214 | 91 | ||||||||||||||||||
80.00% and below |
34,521 | 25,923 | 8,598 | 35,008 | 26,138 | 8,870 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Australia |
$ | 103,449 | $ | 94,754 | $ | 8,696 | $ | 102,042 | $ | 93,072 | $ | 8,970 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other Countries(2) |
||||||||||||||||||||||||
95.01% and above |
$ | 737 | $ | 737 | $ | | $ | 737 | $ | 737 | $ | | ||||||||||||
90.01% to 95.00% |
2,063 | 2,003 | 60 | 2,023 | 1,961 | 62 | ||||||||||||||||||
80.01% to 90.00% |
1,284 | 1,020 | 264 | 1,283 | 1,010 | 273 | ||||||||||||||||||
80.00% and below |
251 | 216 | 35 | 249 | 213 | 36 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Other Countries |
$ | 4,334 | $ | 3,975 | $ | 360 | $ | 4,293 | $ | 3,921 | $ | 372 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not total due to rounding.
(1) | Loan amount in loan-to-value ratio calculation includes capitalized premiums, where applicable. |
(2) | Other Countries flow and primary risk in-force exclude $213 million and $183 million of risk in-force in Europe ceded under quota share reinsurance agreements as of December 31, 2012 and September 30, 2012, respectively. |
41
U.S. Mortgage Insurance Segment
42
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Loss and SalesU.S. Mortgage Insurance Segment
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
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Premiums |
$ | 136 | $ | 136 | $ | 137 | $ | 137 | $ | 546 | $ | 140 | $ | 140 | $ | 142 | $ | 142 | $ | 564 | ||||||||||||||||||||
Net investment income |
12 | 20 | 13 | 23 | 68 | 16 | 29 | 26 | 33 | 104 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
11 | (2 | ) | | 27 | 36 | 42 | 2 | 1 | 1 | 46 | |||||||||||||||||||||||||||||
Insurance and investment product fees and other |
1 | | 20 | 2 | 23 | 3 | | 1 | 1 | 5 | ||||||||||||||||||||||||||||||
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Total revenues |
160 | 154 | 170 | 189 | 673 | 201 | 171 | 170 | 177 | 719 | ||||||||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
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Benefits and other changes in policy reserves |
180 | 174 | 174 | 197 | 725 | 269 | 251 | 526 | 279 | 1,325 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
36 | 40 | 33 | 34 | 143 | 35 | 41 | 41 | 39 | 156 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
1 | 1 | 2 | 1 | 5 | 1 | 1 | 1 | 2 | 5 | ||||||||||||||||||||||||||||||
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Total benefits and expenses |
217 | 215 | 209 | 232 | 873 | 305 | 293 | 568 | 320 | 1,486 | ||||||||||||||||||||||||||||||
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LOSS BEFORE INCOME TAXES |
(57 | ) | (61 | ) | (39 | ) | (43 | ) | (200 | ) | (104 | ) | (122 | ) | (398 | ) | (143 | ) | (767 | ) | ||||||||||||||||||||
Benefit for income taxes |
(30 | ) | (23 | ) | (14 | ) | (17 | ) | (84 | ) | (35 | ) | (45 | ) | (144 | ) | (60 | ) | (284 | ) | ||||||||||||||||||||
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NET LOSS |
(27 | ) | (38 | ) | (25 | ) | (26 | ) | (116 | ) | (69 | ) | (77 | ) | (254 | ) | (83 | ) | (483 | ) | ||||||||||||||||||||
ADJUSTMENT TO NET LOSS: |
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Net investment (gains) losses, net of taxes and other adjustments |
(7 | ) | | | (17 | ) | (24 | ) | (27 | ) | (2 | ) | (1 | ) | | (30 | ) | |||||||||||||||||||||||
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NET OPERATING LOSS |
$ | (34 | ) | $ | (38 | ) | $ | (25 | ) | $ | (43 | ) | $ | (140 | ) | $ | (96 | ) | $ | (79 | ) | $ | (255 | ) | $ | (83 | ) | $ | (513 | ) | ||||||||||
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Effective tax rate (operating loss) |
49.2 | % | 37.2 | % | 37.0 | % | 37.4 | % | 40.7 | % | 33.9 | % | 37.2 | % | 36.0 | % | 42.2 | % | 36.9 | % | ||||||||||||||||||||
SALES: |
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New Insurance Written (NIW) |
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Flow |
$ | 5,100 | $ | 4,700 | $ | 3,600 | $ | 3,000 | $ | 16,400 | $ | 3,200 | $ | 2,700 | $ | 1,900 | $ | 2,000 | $ | 9,800 | ||||||||||||||||||||
Bulk |
| | | | | | | | 400 | 400 | ||||||||||||||||||||||||||||||
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Total U.S. Mortgage Insurance NIW |
$ | 5,100 | $ | 4,700 | $ | 3,600 | $ | 3,000 | $ | 16,400 | $ | 3,200 | $ | 2,700 | $ | 1,900 | $ | 2,400 | $ | 10,200 | ||||||||||||||||||||
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43
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Other MetricsU.S. Mortgage Insurance Segment
(dollar amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
Net Premiums Written |
$ | 139 | $ | 132 | $ | 139 | $ | 142 | $ | 552 | $ | 143 | $ | 143 | $ | 145 | $ | 142 | $ | 573 | ||||||||||||||||||||
New Risk Written |
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Flow |
$ | 1,188 | $ | 1,130 | $ | 843 | $ | 688 | $ | 3,849 | $ | 710 | $ | 653 | $ | 461 | $ | 439 | $ | 2,263 | ||||||||||||||||||||
Bulk |
| | | 7 | 7 | 1 | | | 27 | 28 | ||||||||||||||||||||||||||||||
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Total Primary |
1,188 | 1,130 | 843 | 695 | 3,856 | 711 | 653 | 461 | 466 | 2,291 | ||||||||||||||||||||||||||||||
Pool |
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Total New Risk Written |
$ | 1,188 | $ | 1,130 | $ | 843 | $ | 695 | $ | 3,856 | $ | 711 | $ | 653 | $ | 461 | $ | 466 | $ | 2,291 | ||||||||||||||||||||
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Primary Insurance In-Force |
$ | 110,000 | $ | 111,100 | $ | 112,000 | $ | 113,800 | $ | 116,500 | $ | 119,200 | $ | 120,900 | $ | 123,300 | ||||||||||||||||||||||||
Risk In-Force |
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Flow |
$ | 25,716 | $ | 25,849 | $ | 25,887 | $ | 26,137 | $ | 26,660 | $ | 27,206 | $ | 27,489 | $ | 27,984 | ||||||||||||||||||||||||
Bulk(1) |
491 | 507 | 514 | 520 | 520 | 534 | 540 | 559 | ||||||||||||||||||||||||||||||||
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Total Primary |
26,207 | 26,356 | 26,401 | 26,657 | 27,180 | 27,740 | 28,029 | 28,543 | ||||||||||||||||||||||||||||||||
Pool |
211 | 221 | 229 | 239 | 249 | 271 | 278 | 288 | ||||||||||||||||||||||||||||||||
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Total Risk In-Force |
$ | 26,418 | $ | 26,577 | $ | 26,630 | $ | 26,896 | $ | 27,429 | $ | 28,011 | $ | 28,307 | $ | 28,831 | ||||||||||||||||||||||||
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Primary Risk In-Force Subject To Captives |
14 | % | 15 | % | 27 | % | 31 | % | 33 | % | 36 | % | 38 | % | 41 | % | ||||||||||||||||||||||||
Primary Risk In-Force That Is GSE Conforming |
97 | % | 97 | % | 96 | % | 96 | % | 96 | % | 96 | % | 96 | % | 96 | % | ||||||||||||||||||||||||
GAAP Basis Expense Ratio(2) |
27 | % | 30 | % | 26 | % | 26 | % | 27 | % | 26 | % | 30 | % | 29 | % | 29 | % | 29 | % | ||||||||||||||||||||
Adjusted Expense Ratio(3) |
27 | % | 31 | % | 25 | % | 25 | % | 27 | % | 26 | % | 30 | % | 29 | % | 29 | % | 28 | % | ||||||||||||||||||||
Flow Persistency |
79 | % | 81 | % | 82 | % | 81 | % | 81 | % | 86 | % | 86 | % | 86 | % | ||||||||||||||||||||||||
Gross Written Premiums Ceded To Captives/Total Direct Written Premiums |
5 | % | 8 | % | 10 | % | 12 | % | 13 | % | 14 | % | 15 | % | 17 | % | ||||||||||||||||||||||||
Risk To Capital Ratio(4) |
30.4:1 | 29.8:1 | 29.5:1 | 28.6:1 | 28.8:1 | 27.5:1 | 25.0:1 | 25.0:1 | ||||||||||||||||||||||||||||||||
Average Primary Loan Size (in thousands) |
$ | 167 | $ | 166 | $ | 165 | $ | 164 | $ | 163 | $ | 163 | $ | 162 | $ | 162 | ||||||||||||||||||||||||
Estimated Savings For Loss Mitigation Activities(5) |
$ | 165 | $ | 189 | $ | 162 | $ | 158 | $ | 674 | $ | 147 | $ | 168 | $ | 130 | $ | 122 | $ | 567 |
The | expense ratios included above were calculated using whole dollars and may be different than the ratios calculated using the rounded numbers included herein. |
(1) | As of December 31, 2012, 83% of our bulk risk-in force was related to loans financed by lenders who participated in the mortgage programs sponsored by the Federal Home Loan Banks. |
(2) | The ratio of an insurers general expenses to net earned premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. |
(3) | The ratio of an insurers general expenses to net written premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. |
(4) | Certain states limit a private mortgage insurers risk in-force to 25 times the total of the insurers policyholders surplus plus the statutory contingency reserve, commonly known as the risk to capital requirement. The U.S. mortgage insurance business maintains new business writing flexibility in all states, supported by risk-to-capital waivers or existing authority to write new business in 44 states in its primary writing entity, with the remaining six states written out of other available entities. The current period risk to capital ratio is an estimate due to the timing of the filing of statutory statements and is prepared consistent with the presentation of the statutory financial statements in the combined annual statement of the U.S. mortgage insurance business. |
(5) | Loss mitigation activities include rescissions, cancellations, borrower loan modifications, repayment plans, lender- and borrower-titled pre-sales, claims administration and other loan workouts. Estimated savings for rescissions represent the reduction in carried loss reserves, net of premium refunds and reinstatement of prior rescissions. Estimated savings for loan modifications and other cure related loss mitigation actions represent the reduction in carried loss reserves. For non-cure related actions, including pre-sales, the estimated savings represent the difference between the full claim obligation and the actual amount paid. |
44
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Loss MetricsU.S. Mortgage Insurance Segment
(dollar amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
Paid Claims |
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Flow |
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Direct |
$ | 260 | $ | 272 | $ | 295 | $ | 283 | $ | 1,110 | $ | 240 | $ | 256 | $ | 239 | $ | 315 | $ | 1,050 | ||||||||||||||||||||
Assumed(1) |
17 | 19 | 23 | 20 | 79 | 26 | 25 | 32 | 30 | 113 | ||||||||||||||||||||||||||||||
Ceded |
(19 | ) | (25 | ) | (55 | ) | (39 | ) | (138 | ) | (45 | ) | (39 | ) | (83 | ) | (109 | ) | (276 | ) | ||||||||||||||||||||
Loss adjustment expenses |
8 | 7 | 7 | 9 | 31 | 10 | 11 | 11 | 13 | 45 | ||||||||||||||||||||||||||||||
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Total Flow |
266 | 273 | 270 | 273 | 1,082 | 231 | 253 | 199 | 249 | 932 | ||||||||||||||||||||||||||||||
Bulk |
3 | 3 | 6 | 4 | 16 | 6 | (2 | ) | 3 | 3 | 10 | |||||||||||||||||||||||||||||
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Total Primary |
269 | 276 | 276 | 277 | 1,098 | 237 | 251 | 202 | 252 | 942 | ||||||||||||||||||||||||||||||
Pool |
2 | 1 | 2 | 2 | 7 | 1 | 1 | 1 | 1 | 4 | ||||||||||||||||||||||||||||||
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Total Paid Claims |
$ | 271 | $ | 277 | $ | 278 | $ | 279 | $ | 1,105 | $ | 238 | $ | 252 | $ | 203 | $ | 253 | $ | 946 | ||||||||||||||||||||
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Average Paid Claim (in thousands) |
$ | 43.7 | $ | 41.1 | $ | 38.3 | $ | 43.6 | $ | 41.0 | $ | 46.9 | $ | 40.8 | $ | 39.7 | ||||||||||||||||||||||||
Average Direct Paid Claim (in thousands)(2) |
$ | 43.2 | $ | 41.7 | $ | 42.5 | $ | 42.7 | $ | 43.2 | $ | 49.1 | $ | 49.7 | $ | 50.8 | ||||||||||||||||||||||||
Average Reserve Per Delinquency (in thousands) |
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Flow |
$ | 29.7 | $ | 30.0 | $ | 30.6 | $ | 30.6 | $ | 29.1 | $ | 28.8 | $ | 29.2 | $ | 25.4 | ||||||||||||||||||||||||
Bulk loans with established reserve |
25.1 | 24.3 | 25.0 | 24.1 | 24.2 | 24.0 | 23.7 | 19.9 | ||||||||||||||||||||||||||||||||
Bulk loans with no reserve(3) |
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Reserves: |
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Flow direct case |
$ | 1,728 | $ | 1,835 | $ | 1,954 | $ | 2,087 | $ | 2,199 | $ | 2,227 | $ | 2,256 | $ | 1,995 | ||||||||||||||||||||||||
Bulk direct case |
33 | 33 | 32 | 34 | 36 | 36 | 35 | 34 | ||||||||||||||||||||||||||||||||
Assumed(1) |
65 | 50 | 53 | 60 | 60 | 64 | 64 | 67 | ||||||||||||||||||||||||||||||||
All other(4) |
183 | 196 | 195 | 200 | 193 | 159 | 151 | 124 | ||||||||||||||||||||||||||||||||
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Total Reserves |
$ | 2,009 | $ | 2,114 | $ | 2,234 | $ | 2,381 | $ | 2,488 | $ | 2,486 | $ | 2,506 | $ | 2,220 | ||||||||||||||||||||||||
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Beginning Reserves |
$ | 2,114 | $ | 2,234 | $ | 2,381 | $ | 2,488 | $ | 2,488 | $ | 2,486 | $ | 2,506 | $ | 2,220 | $ | 2,282 | $ | 2,282 | ||||||||||||||||||||
Paid claims |
(290 | ) | (302 | ) | (333 | ) | (318 | ) | (1,243 | ) | (282 | ) | (292 | ) | (286 | ) | (362 | ) | (1,222 | ) | ||||||||||||||||||||
Increase in reserves |
185 | 182 | 186 | 211 | 764 | 284 | 272 | 572 | 300 | 1,428 | ||||||||||||||||||||||||||||||
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Ending Reserves |
$ | 2,009 | $ | 2,114 | $ | 2,234 | $ | 2,381 | $ | 2,009 | $ | 2,488 | $ | 2,486 | $ | 2,506 | $ | 2,220 | $ | 2,488 | ||||||||||||||||||||
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Beginning Reinsurance Recoverable(5) |
$ | 94 | $ | 111 | $ | 153 | $ | 178 | $ | 178 | $ | 207 | $ | 226 | $ | 264 | $ | 351 | $ | 351 | ||||||||||||||||||||
Ceded paid claims |
(19 | ) | (25 | ) | (55 | ) | (39 | ) | (138 | ) | (44 | ) | (40 | ) | (83 | ) | (109 | ) | (276 | ) | ||||||||||||||||||||
Increase in recoverable |
5 | 8 | 13 | 14 | 40 | 15 | 21 | 45 | 22 | 103 | ||||||||||||||||||||||||||||||
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Ending Reinsurance Recoverable |
$ | 80 | $ | 94 | $ | 111 | $ | 153 | $ | 80 | $ | 178 | $ | 207 | $ | 226 | $ | 264 | $ | 178 | ||||||||||||||||||||
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Loss Ratio(6) |
131 | % | 129 | % | 127 | % | 144 | % | 133 | % | 189 | % | 181 | % | 369 | % | 197 | % | 234 | % |
The | loss ratio included above was calculated using whole dollars and may be different than the ratio calculated using the rounded numbers included herein. |
(1) | Assumed is comprised of reinsurance arrangements with state governmental housing finance agencies. |
(2) | Average direct paid claim excludes loss adjustment expenses, the impact of reinsurance and a negotiated servicer settlement. |
(3) | Reserves were not established on loans where the company was in a secondary loss position due to an existing deductible and the company believes currently have no risk for claim. |
(4) | Other includes loss adjustment expenses, pool and incurred but not reported reserves. |
(5) | Reinsurance recoverable excludes ceded unearned premium recoveries and amounts for which cash proceeds have not yet been received. |
(6) | The ratio of incurred losses to net earned premiums. Excluding the lender portfolio settlement in the first quarter of 2012, the loss ratio was 137% for the three months ended March 31, 2012, 132% for the six months ended June 30, 2012, 131% for the nine months ended September 30, 2012 and 131% for the twelve months ended December 31,2012. |
45
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Delinquency MetricsU.S. Mortgage Insurance Segment
(dollar amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
Number of Primary Delinquencies |
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Flow |
66,340 | 69,174 | 71,878 | 76,478 | 83,931 | 84,910 | 84,442 | 85,758 | ||||||||||||||||||||||||||||||||
Bulk loans with an established reserve |
1,415 | 1,441 | 1,381 | 1,522 | 1,592 | 1,604 | 1,569 | 1,814 | ||||||||||||||||||||||||||||||||
Bulk loans with no reserve(1) |
1,484 | 1,512 | 1,424 | 1,474 | 1,484 | 1,506 | 1,453 | 1,446 | ||||||||||||||||||||||||||||||||
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Total Number of Primary Delinquencies |
69,239 | 72,127 | 74,683 | 79,474 | 87,007 | 88,020 | 87,464 | 89,018 | ||||||||||||||||||||||||||||||||
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Beginning Number of Primary Delinquencies |
72,127 | 74,683 | 79,474 | 87,007 | 87,007 | 88,020 | 87,464 | 89,018 | 95,395 | 95,395 | ||||||||||||||||||||||||||||||
New delinquencies |
16,871 | 17,733 | 16,703 | 18,217 | 69,524 | 22,094 | 23,493 | 21,272 | 23,866 | 90,725 | ||||||||||||||||||||||||||||||
Delinquency cures |
(13,592 | ) | (13,598 | ) | (14,251 | ) | (19,388 | ) | (60,829 | ) | (17,357 | ) | (17,595 | ) | (17,908 | ) | (23,908 | ) | (76,768 | ) | ||||||||||||||||||||
Paid claims |
(6,167 | ) | (6,691 | ) | (7,243 | ) | (6,362 | ) | (26,463 | ) | (5,750 | ) | (5,342 | ) | (4,918 | ) | (6,335 | ) | (22,345 | ) | ||||||||||||||||||||
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Ending Number of Primary Delinquencies |
69,239 | 72,127 | 74,683 | 79,474 | 69,239 | 87,007 | 88,020 | 87,464 | 89,018 | 87,007 | ||||||||||||||||||||||||||||||
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Composition of Cures |
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Reported delinquent and cured-intraquarter |
2,557 | 2,882 | 2,354 | 3,582 | 2,851 | 3,181 | 2,670 | 5,195 | ||||||||||||||||||||||||||||||||
Number of missed payments delinquent prior to cure: |
||||||||||||||||||||||||||||||||||||||||
3 payments or less |
7,120 | 6,289 | 7,399 | 10,154 | 8,835 | 8,520 | 8,953 | 11,454 | ||||||||||||||||||||||||||||||||
4 - 11 payments |
2,516 | 2,965 | 3,371 | 3,569 | 3,408 | 3,584 | 4,146 | 5,183 | ||||||||||||||||||||||||||||||||
12 payments or more |
1,399 | 1,462 | 1,127 | 2,083 | 2,263 | 2,310 | 2,139 | 2,076 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total |
13,592 | 13,598 | 14,251 | 19,388 | 17,357 | 17,595 | 17,908 | 23,908 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Primary Delinquencies by Missed Payment Status |
||||||||||||||||||||||||||||||||||||||||
3 payments or less |
17,563 | 17,684 | 16,708 | 17,260 | 22,165 | 22,444 | 21,125 | 20,920 | ||||||||||||||||||||||||||||||||
4 - 11 payments |
18,155 | 18,713 | 20,830 | 24,137 | 25,334 | 25,055 | 26,969 | 31,070 | ||||||||||||||||||||||||||||||||
12 payments or more |
33,521 | 35,730 | 37,145 | 38,077 | 39,508 | 40,521 | 39,370 | 37,028 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Primary Delinquencies |
69,239 | 72,127 | 74,683 | 79,474 | 87,007 | 88,020 | 87,464 | 89,018 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||
Flow Delinquencies and Percentage Reserved by Payment Status |
Delinquencies | Direct
Case Reserves(2) |
Risk In-Force | Reserves as % of Risk In-Force |
||||||||||||||||||||||||||||||||||||
3 payments or less in default |
16,977 | $ | 150 | $ | 668 | 22 | % | |||||||||||||||||||||||||||||||||
4 - 11 payments in default |
17,398 | 441 | 749 | 59 | % | |||||||||||||||||||||||||||||||||||
12 payments or more in default |
31,965 | 1,137 | 1,562 | 73 | % | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Total |
66,340 | $ | 1,728 | $ | 2,979 | 58 | % | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
December 31, 2011 | ||||||||||||||||||||||||||||||||||||||||
Flow Delinquencies and Percentage |
Delinquencies | Direct
Case Reserves(2) |
Risk In-Force | Reserves as % of Risk In-Force |
||||||||||||||||||||||||||||||||||||
3 payments or less in default |
21,272 | $ | 193 | $ | 835 | 23 | % | |||||||||||||||||||||||||||||||||
4 - 11 payments in default |
24,493 | 646 | 1,075 | 60 | % | |||||||||||||||||||||||||||||||||||
12 payments or more in default |
38,166 | 1,360 | 1,870 | 73 | % | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Total |
83,931 | $ | 2,199 | $ | 3,780 | 58 | % | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
(1) | Reserves were not established on loans where the company was in a secondary loss position due to an existing deductible and the company believes currently have no risk for claim. |
(2) | Direct flow case reserves exclude loss adjustment expenses, incurred but not reported and reinsurance reserves. |
46
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Portfolio Quality MetricsU.S. Mortgage Insurance Segment
2012 | 2011 | |||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||||||||||||
Risk In-Force by Credit Quality(1) |
||||||||||||||||||||||||||||||||
Primary by FICO Scores >679(2) |
75 | % | 74 | % | 73 | % | 72 | % | 72 | % | 71 | % | 71 | % | 70 | % | ||||||||||||||||
Primary by FICO Scores 620-679 |
20 | % | 21 | % | 22 | % | 23 | % | 24 | % | 25 | % | 25 | % | 26 | % | ||||||||||||||||
Primary by FICO Scores 575-619 |
4 | % | 4 | % | 4 | % | 4 | % | 4 | % | 4 | % | 4 | % | 4 | % | ||||||||||||||||
Primary by FICO Scores <575 |
1 | % | 1 | % | 1 | % | 1 | % | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||||||||||
Flow by FICO Scores >679(2) |
75 | % | 74 | % | 73 | % | 72 | % | 72 | % | 71 | % | 71 | % | 70 | % | ||||||||||||||||
Flow by FICO Scores 620-679 |
20 | % | 21 | % | 22 | % | 23 | % | 24 | % | 25 | % | 25 | % | 26 | % | ||||||||||||||||
Flow by FICO Scores 575-619 |
4 | % | 4 | % | 4 | % | 4 | % | 4 | % | 4 | % | 4 | % | 4 | % | ||||||||||||||||
Flow by FICO Scores <575 |
1 | % | 1 | % | 1 | % | 1 | % | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||||||||||
Bulk by FICO Scores >679 |
89 | % | 89 | % | 89 | % | 89 | % | 89 | % | 89 | % | 89 | % | 89 | % | ||||||||||||||||
Bulk by FICO Scores 620-679 |
9 | % | 9 | % | 9 | % | 9 | % | 9 | % | 9 | % | 9 | % | 9 | % | ||||||||||||||||
Bulk by FICO Scores 575-619 |
1 | % | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||||||||
Bulk by FICO Scores <575 |
1 | % | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||||||||
Primary A minus |
4 | % | 4 | % | 4 | % | 4 | % | 5 | % | 5 | % | 5 | % | 5 | % | ||||||||||||||||
Primary sub-prime(2), (3) |
3 | % | 3 | % | 3 | % | 3 | % | 3 | % | 3 | % | 3 | % | 3 | % | ||||||||||||||||
Primary Loans |
||||||||||||||||||||||||||||||||
Primary loans in-force |
658,527 | 669,618 | 679,817 | 693,807 | 714,467 | 733,383 | 746,740 | 763,439 | ||||||||||||||||||||||||
Primary delinquent loans |
69,239 | 72,127 | 74,683 | 79,474 | 87,007 | 88,020 | 87,464 | 89,018 | ||||||||||||||||||||||||
Primary delinquency rate |
10.51 | % | 10.77 | % | 10.99 | % | 11.45 | % | 12.18 | % | 12.00 | % | 11.71 | % | 11.66 | % | ||||||||||||||||
Flow loans in-force |
595,348 | 601,851 | 607,133 | 616,623 | 633,246 | 648,242 | 658,251 | 673,276 | ||||||||||||||||||||||||
Flow delinquent loans |
66,340 | 69,174 | 71,878 | 76,478 | 83,931 | 84,910 | 84,442 | 85,758 | ||||||||||||||||||||||||
Flow delinquency rate |
11.14 | % | 11.49 | % | 11.84 | % | 12.40 | % | 13.25 | % | 13.10 | % | 12.83 | % | 12.74 | % | ||||||||||||||||
Bulk loans in-force |
63,179 | 67,767 | 72,684 | 77,184 | 81,221 | 85,141 | 88,489 | 90,163 | ||||||||||||||||||||||||
Bulk delinquent loans |
2,899 | 2,953 | 2,805 | 2,996 | 3,076 | 3,110 | 3,022 | 3,260 | ||||||||||||||||||||||||
Bulk delinquency rate |
4.59 | % | 4.36 | % | 3.86 | % | 3.88 | % | 3.79 | % | 3.65 | % | 3.42 | % | 3.62 | % | ||||||||||||||||
A minus and sub-prime loans in-force(2) |
46,631 | 48,696 | 50,676 | 52,625 | 54,713 | 56,765 | 58,510 | 60,316 | ||||||||||||||||||||||||
A minus and sub-prime delinquent loans |
12,817 | 13,149 | 13,534 | 14,258 | 16,038 | 16,373 | 16,351 | 16,633 | ||||||||||||||||||||||||
A minus and sub-prime delinquency rate |
27.49 | % | 27.00 | % | 26.71 | % | 27.09 | % | 29.31 | % | 28.84 | % | 27.95 | % | 27.58 | % | ||||||||||||||||
Pool Loans |
||||||||||||||||||||||||||||||||
Pool loans in-force |
12,949 | 13,237 | 13,562 | 13,942 | 14,418 | 16,574 | 16,943 | 17,421 | ||||||||||||||||||||||||
Pool delinquent loans |
721 | 670 | 679 | 695 | 778 | 957 | 931 | 913 | ||||||||||||||||||||||||
Pool delinquency rate |
5.57 | % | 5.06 | % | 5.01 | % | 4.98 | % | 5.40 | % | 5.77 | % | 5.49 | % | 5.24 | % |
(1) | Loans with unknown FICO scores are included in the 620-679 category. |
(2) | In the fourth quarter 2012, all FICO score classifications were conformed to be based upon FICO scores at loan closing. Previously, certain classifications were based upon FICO scores at a point in time post-loan closing. All prior periods have been re-presented to conform to this modified classification. |
(3) | Excludes loans classified as A minus. |
47
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Portfolio Quality MetricsU.S. Mortgage Insurance Segment
December 31, 2012 | September 30, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||||||
% of Total Reserves(1) |
% of Primary Risk In-Force |
Primary Delinquency Rate |
%
of Total Reserves(1) |
% of Primary Risk In-Force |
Primary Delinquency Rate |
% of Total Reserves(1) |
% of Primary Risk In-Force |
Primary Delinquency Rate |
||||||||||||||||||||||||||||
By Region |
||||||||||||||||||||||||||||||||||||
Southeast(2) |
35 | % | 21 | % | 14.69 | % | 35 | % | 22 | % | 15.14 | % | 35 | % | 22 | % | 17.10 | % | ||||||||||||||||||
South Central(3) |
9 | 15 | 7.71 | % | 9 | 16 | 8.10 | % | 11 | 16 | 10.15 | % | ||||||||||||||||||||||||
Northeast(4) |
16 | 15 | 13.32 | % | 15 | 15 | 12.91 | % | 12 | 14 | 12.80 | % | ||||||||||||||||||||||||
Pacific(5) |
12 | 12 | 9.72 | % | 12 | 11 | 10.41 | % | 13 | 11 | 12.52 | % | ||||||||||||||||||||||||
North Central(6) |
11 | 12 | 9.81 | % | 12 | 12 | 10.27 | % | 12 | 12 | 11.89 | % | ||||||||||||||||||||||||
Great Lakes(7) |
6 | 9 | 7.78 | % | 6 | 9 | 7.96 | % | 7 | 9 | 9.00 | % | ||||||||||||||||||||||||
New England(8) |
4 | 6 | 9.63 | % | 4 | 5 | 9.77 | % | 3 | 5 | 10.59 | % | ||||||||||||||||||||||||
Mid-Atlantic(9) |
4 | 5 | 9.87 | % | 4 | 5 | 9.95 | % | 4 | 5 | 10.73 | % | ||||||||||||||||||||||||
Plains(10) |
3 | 5 | 6.62 | % | 3 | 5 | 6.64 | % | 3 | 6 | 7.87 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total |
100 | % | 100 | % | 10.51 | % | 100 | % | 100 | % | 10.77 | % | 100 | % | 100 | % | 12.18 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
By State |
||||||||||||||||||||||||||||||||||||
Florida |
25 | % | 7 | % | 26.24 | % | 25 | % | 7 | % | 27.06 | % | 24 | % | 7 | % | 29.30 | % | ||||||||||||||||||
Texas |
3 | % | 7 | % | 6.86 | % | 3 | % | 7 | % | 6.91 | % | 3 | % | 7 | % | 8.34 | % | ||||||||||||||||||
New York |
7 | % | 7 | % | 11.85 | % | 6 | % | 7 | % | 11.27 | % | 5 | % | 7 | % | 10.66 | % | ||||||||||||||||||
California |
5 | % | 6 | % | 7.25 | % | 5 | % | 6 | % | 8.04 | % | 6 | % | 6 | % | 10.86 | % | ||||||||||||||||||
Illinois |
8 | % | 5 | % | 14.29 | % | 8 | % | 5 | % | 14.84 | % | 8 | % | 5 | % | 16.70 | % | ||||||||||||||||||
New Jersey |
6 | % | 4 | % | 19.44 | % | 6 | % | 4 | % | 18.98 | % | 5 | % | 4 | % | 19.07 | % | ||||||||||||||||||
Pennsylvania |
3 | % | 4 | % | 11.23 | % | 3 | % | 4 | % | 11.15 | % | 2 | % | 4 | % | 11.85 | % | ||||||||||||||||||
North Carolina |
3 | % | 4 | % | 9.99 | % | 3 | % | 4 | % | 10.26 | % | 3 | % | 4 | % | 11.89 | % | ||||||||||||||||||
Georgia |
3 | % | 4 | % | 11.88 | % | 3 | % | 4 | % | 12.34 | % | 4 | % | 4 | % | 14.79 | % | ||||||||||||||||||
Ohio |
2 | % | 3 | % | 8.03 | % | 2 | % | 3 | % | 8.14 | % | 2 | % | 3 | % | 8.73 | % |
(1) | Total reserves were $2,009 million, $2,114 million and $2,488 million as of December 31, 2012, September 30, 2012 and December 31, 2011, respectively. |
(2) | Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee. |
(3) | Arizona, Colorado, Louisiana, New Mexico, Oklahoma, Texas and Utah. |
(4) | New Jersey, New York and Pennsylvania. |
(5) | Alaska, California, Hawaii, Nevada, Oregon and Washington. |
(6) | Illinois, Minnesota, Missouri and Wisconsin. |
(7) | Indiana, Kentucky, Michigan and Ohio. |
(8) | Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. |
(9) | Delaware, Maryland, Virginia, Washington D.C. and West Virginia. |
(10) | Idaho, Iowa, Kansas, Montana, Nebraska, North Dakota, South Dakota and Wyoming. |
48
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Portfolio Quality MetricsU.S. Mortgage Insurance Segment
(amounts in millions)
December 31, 2012 | September 30, 2012 | December 31, 2011 | ||||||||||||||||||||||
Primary Risk In-Force |
Primary Delinquency Rate |
Primary Risk In-Force |
Primary Delinquency Rate |
Primary Risk In-Force |
Primary Delinquency Rate |
|||||||||||||||||||
Lender concentration (by original applicant) |
$ | 26,207 | 10.51 | % | $ | 26,356 | 10.77 | % | $ | 27,180 | 12.18 | % | ||||||||||||
Top 10 lenders |
12,835 | 12.69 | % | 12,950 | 13.07 | % | 13,355 | 15.49 | % | |||||||||||||||
Top 20 lenders |
14,521 | 12.40 | % | 14,692 | 12.67 | % | 15,306 | 14.79 | % | |||||||||||||||
Loan-to-value ratio |
||||||||||||||||||||||||
95.01% and above |
$ | 7,238 | 13.19 | % | $ | 7,136 | 13.75 | % | $ | 6,848 | 16.89 | % | ||||||||||||
90.01% to 95.00% |
9,297 | 10.00 | % | 9,318 | 10.28 | % | 9,563 | 11.74 | % | |||||||||||||||
80.01% to 90.00% |
9,242 | 10.57 | % | 9,459 | 10.84 | % | 10,311 | 12.00 | % | |||||||||||||||
80.00% and below |
430 | 3.54 | % | 443 | 3.29 | % | 458 | 2.90 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
$ | 26,207 | 10.51 | % | $ | 26,356 | 10.77 | % | $ | 27,180 | 12.18 | % | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Loan grade(1) |
||||||||||||||||||||||||
Prime |
$ | 24,527 | 9.22 | % | $ | 24,603 | 9.50 | % | $ | 25,219 | 10.76 | % | ||||||||||||
A minus and sub-prime |
1,680 | 27.49 | % | 1,753 | 27.00 | % | 1,961 | 29.31 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
$ | 26,207 | 10.51 | % | $ | 26,356 | 10.77 | % | $ | 27,180 | 12.18 | % | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Loan type(2) |
||||||||||||||||||||||||
First mortgages |
||||||||||||||||||||||||
Fixed rate mortgage |
||||||||||||||||||||||||
Flow |
$ | 25,293 | 10.89 | % | $ | 25,403 | 11.24 | % | $ | 26,133 | 12.98 | % | ||||||||||||
Bulk |
473 | 4.43 | % | 488 | 4.19 | % | 500 | 3.60 | % | |||||||||||||||
Adjustable rate mortgage |
||||||||||||||||||||||||
Flow |
423 | 29.60 | % | 446 | 29.50 | % | 527 | 30.16 | % | |||||||||||||||
Bulk |
18 | 11.74 | % | 19 | 12.17 | % | 20 | 13.23 | % | |||||||||||||||
Second mortgages |
| | | | | | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
$ | 26,207 | 10.51 | % | $ | 26,356 | 10.77 | % | $ | 27,180 | 12.18 | % | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Type of documentation |
||||||||||||||||||||||||
Alt-A |
||||||||||||||||||||||||
Flow |
$ | 593 | 33.93 | % | $ | 631 | 33.97 | % | $ | 747 | 34.44 | % | ||||||||||||
Bulk |
35 | 6.24 | % | 36 | 5.89 | % | 38 | 5.60 | % | |||||||||||||||
Standard(3) |
||||||||||||||||||||||||
Flow |
25,123 | 10.67 | % | 25,218 | 11.01 | % | 25,913 | 12.74 | % | |||||||||||||||
Bulk |
456 | 4.36 | % | 471 | 4.15 | % | 482 | 3.55 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
$ | 26,207 | 10.51 | % | $ | 26,356 | 10.77 | % | $ | 27,180 | 12.18 | % | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Mortgage term |
||||||||||||||||||||||||
15 years and under |
$ | 816 | 1.27 | % | $ | 724 | 1.41 | % | $ | 534 | 1.69 | % | ||||||||||||
More than 15 years |
25,391 | 11.16 | % | 25,632 | 11.39 | % | 26,646 | 12.79 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
$ | 26,207 | 10.51 | % | $ | 26,356 | 10.77 | % | $ | 27,180 | 12.18 | % | ||||||||||||
|
|
|
|
|
|
(1) | In the fourth quarter 2012, all FICO score classifications were conformed to be based upon FICO scores at loan closing. Previously, certain classifications were based upon FICO scores at a point in time post-loan closing. All prior periods have been re-presented to conform to this modified classification. |
(2) | For loan type in this table, any loan with an interest rate that is fixed for an initial term of five years or more is categorized as a fixed rate mortgage. |
(3) | Standard includes loans with reduced or different documentation requirements that meet specifications of GSE or other lender proprietary approved underwriting systems, and other reduced documentation programs, with historical and expected delinquency rates at origination consistent with historical and expected delinquency rates of the company's standard portfolio. |
49
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Portfolio Quality MetricsU.S. Mortgage Insurance Segment
(dollar amounts in millions)
December 31, 2012 | ||||||||||||||||||||||||||||
Policy Year |
Average Rate(1) |
% of
Total Reserves(2) |
Primary Insurance In-Force |
% of Total | Primary Risk In-Force |
% of Total | Deliquency Rate |
|||||||||||||||||||||
2001 and prior |
7.75 | % | 2.0 | % | $ | 1,914 | 1.7 | % | $ | 477 | 1.8 | % | 16.79 | % | ||||||||||||||
2002 |
6.60 | % | 1.4 | 1,457 | 1.3 | 364 | 1.4 | 13.83 | ||||||||||||||||||||
2003 |
5.61 | % | 3.7 | 5,830 | 5.3 | 973 | 3.7 | 9.49 | ||||||||||||||||||||
2004 |
5.85 | % | 4.7 | 4,054 | 3.7 | 942 | 3.6 | 13.49 | ||||||||||||||||||||
2005 |
5.87 | % | 12.7 | 7,328 | 6.7 | 1,914 | 7.3 | 16.61 | ||||||||||||||||||||
2006 |
6.26 | % | 19.1 | 10,078 | 9.2 | 2,519 | 9.6 | 18.09 | ||||||||||||||||||||
2007 |
6.26 | % | 38.2 | 22,992 | 20.9 | 5,712 | 21.8 | 17.47 | ||||||||||||||||||||
2008 |
5.82 | % | 17.5 | 21,069 | 19.2 | 5,277 | 20.2 | 9.41 | ||||||||||||||||||||
2009 |
5.06 | % | 0.4 | 4,882 | 4.4 | 985 | 3.8 | 1.27 | ||||||||||||||||||||
2010 |
4.67 | % | 0.2 | 6,322 | 5.7 | 1,395 | 5.3 | 0.68 | ||||||||||||||||||||
2011 |
4.44 | % | 0.1 | 8,136 | 7.4 | 1,897 | 7.2 | 0.39 | ||||||||||||||||||||
2012 |
3.75 | % | | 15,930 | 14.5 | 3,752 | 14.3 | 0.05 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
5.60 | % | 100.0 | % | $ | 109,992 | 100.0 | % | $ | 26,207 | 100.0 | % | 10.51 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
December 31, 2012 | September 30, 2012 | |||||||||||||||||||||||||||
Occupancy and Property Type |
% of Primary Risk In-Force |
Deliquency Rate |
% of
Primary Risk In-Force |
Deliquency Rate |
||||||||||||||||||||||||
Occupancy Status |
||||||||||||||||||||||||||||
Primary residence |
94.2 | % | 10.44 | % | 94.0 | % | 10.69 | % | ||||||||||||||||||||
Second home |
3.4 | 11.04 | 3.6 | 11.25 | ||||||||||||||||||||||||
Non-owner occupied |
2.4 | 11.9 | 2.4 | 12.45 | ||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
Total |
100.0 | % | 10.51 | % | 100.0 | % | 10.77 | % | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
Property Type |
||||||||||||||||||||||||||||
Single family detached |
86.9 | % | 10.16 | % | 86.7 | % | 10.41 | % | ||||||||||||||||||||
Condominium and co-operative |
11.1 | 12.34 | 11.2 | 12.75 | ||||||||||||||||||||||||
Multi-family and other |
2.0 | 16.11 | 2.1 | 15.8 | ||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
Total |
100.0 | % | 10.51 | % | 100.0 | % | 10.77 | % | ||||||||||||||||||||
|
|
|
|
(1) | Average Annual Mortgage Interest Rate |
(2) | Total reserves were $2,009 million as of December 31, 2012. |
50
Corporate and Other Division
51
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income (Loss)Corporate and Other Division
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 166 | $ | 165 | $ | 176 | $ | 180 | $ | 687 | $ | 194 | $ | 298 | $ | 307 | $ | 300 | $ | 1,099 | ||||||||||||||||||||
Net investment income |
75 | 69 | 88 | 74 | 306 | 83 | 73 | 108 | 81 | 345 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
(7 | ) | 2 | (24 | ) | 8 | (21 | ) | (38 | ) | (172 | ) | (13 | ) | (12 | ) | (235 | ) | ||||||||||||||||||||||
Insurance and investment product fees and other |
166 | 170 | 197 | 187 | 720 | 258 | 183 | 181 | 181 | 803 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenues |
400 | 406 | 437 | 449 | 1,692 | 497 | 382 | 583 | 550 | 2,012 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
51 | 39 | 55 | 42 | 187 | 32 | 123 | 104 | 110 | 369 | ||||||||||||||||||||||||||||||
Interest credited |
32 | 33 | 34 | 33 | 132 | 32 | 34 | 34 | 35 | 135 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
252 | 232 | 239 | 268 | 991 | 281 | 287 | 294 | 292 | 1,154 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
52 | 50 | 48 | 31 | 181 | 40 | 68 | 66 | 56 | 230 | ||||||||||||||||||||||||||||||
Goodwill Impairment |
| 89 | | | 89 | 29 | | | | 29 | ||||||||||||||||||||||||||||||
Interest expense |
89 | 93 | 99 | 73 | 354 | 85 | 88 | 103 | 95 | 371 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total benefits and expenses |
476 | 536 | 475 | 447 | 1,934 | 499 | 600 | 601 | 588 | 2,288 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
(76 | ) | (130 | ) | (38 | ) | 2 | (242 | ) | (2 | ) | (218 | ) | (18 | ) | (38 | ) | (276 | ) | |||||||||||||||||||||
Provision (benefit) for income taxes |
(25 | ) | (24 | ) | (3 | ) | (6 | ) | (58 | ) | (39 | ) | (86 | ) | 26 | | (99 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET INCOME (LOSS) |
(51 | ) | (106 | ) | (35 | ) | 8 | (184 | ) | 37 | (132 | ) | (44 | ) | (38 | ) | (177 | ) | ||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
9 | (1 | ) | 15 | (5 | ) | 18 | 23 | 103 | 8 | 5 | 139 | ||||||||||||||||||||||||||||
Goodwill impairment, net of taxes |
| 86 | | | 86 | 19 | | | | 19 | ||||||||||||||||||||||||||||||
Gain on sale of business, net of taxes |
2 | | (15 | ) | | (13 | ) | (36 | ) | | | | (36 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET OPERATING INCOME (LOSS) |
$ | (40 | ) | $ | (21 | ) | $ | (35 | ) | $ | 3 | $ | (93 | ) | $ | 43 | $ | (29 | ) | $ | (36 | ) | $ | (33 | ) | $ | (55 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||
Effective tax rate (operating income (loss)) |
35.5 | % | 48.3 | % | 35.9 | % | 155.1 | % | 43.2 | % | NM | (1) | 51.1 | % | NM | (1) | -13.8 | % | 52.3 | % |
(1) | NM is defined as not meaningful for percentages greater than 200%. |
52
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income (Loss)Corporate and Other Division
(amounts in millions)
Three months ended December 31, 2012 |
International Protection Segment |
Wealth Management Segment |
Runoff Segment | Corporate and Other(1) | Total | |||||||||||||||
REVENUES: |
||||||||||||||||||||
Premiums |
$ | 165 | $ | | $ | 1 | $ | | $ | 166 | ||||||||||
Net investment income |
27 | | 37 | 11 | 75 | |||||||||||||||
Net investment gains (losses) |
3 | | 2 | (12 | ) | (7 | ) | |||||||||||||
Insurance and investment product fees and other |
| 74 | 52 | 40 | 166 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
195 | 74 | 92 | 39 | 400 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||
Benefits and other changes in policy reserves |
38 | | 13 | | 51 | |||||||||||||||
Interest credited |
| | 32 | | 32 | |||||||||||||||
Acquisition and operating expenses, net of deferrals |
113 | 59 | 21 | 59 | 252 | |||||||||||||||
Amortization of deferred acquisition costs and intangibles |
28 | 1 | 20 | 3 | 52 | |||||||||||||||
Interest expense |
9 | | | 80 | 89 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total benefits and expenses |
188 | 60 | 86 | 142 | 476 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
7 | 14 | 6 | (103 | ) | (76 | ) | |||||||||||||
Provision (benefit) for income taxes |
(2 | ) | 8 | | (31 | ) | (25 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME (LOSS) |
9 | 6 | 6 | (72 | ) | (51 | ) | |||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(1 | ) | | 2 | 8 | 9 | ||||||||||||||
Gain on sale of business, net of taxes |
| 2 | | | 2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OPERATING INCOME (LOSS) |
$ | 8 | $ | 8 | $ | 8 | $ | (64 | ) | $ | (40 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|||||||||||||||||||
Effective tax rate (operating income (loss)) |
-46.6 | % | 41.9 | % | 18.4 | % | 29.7 | % | 35.5 | % | ||||||||||
Three months ended December 31, 2011 |
International Protection Segment |
Wealth Management Segment |
Runoff Segment | Corporate and Other(1) | Total | |||||||||||||||
REVENUES: |
||||||||||||||||||||
Premiums |
$ | 192 | $ | | $ | 2 | $ | | $ | 194 | ||||||||||
Net investment income |
34 | | 36 | 13 | 83 | |||||||||||||||
Net investment gains (losses) |
(2 | ) | | (4 | ) | (32 | ) | (38 | ) | |||||||||||
Insurance and investment product fees and other |
2 | 114 | 128 | 14 | 258 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
226 | 114 | 162 | (5 | ) | 497 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||
Benefits and other changes in policy reserves |
31 | | 1 | | 32 | |||||||||||||||
Interest credited |
| | 32 | | 32 | |||||||||||||||
Acquisition and operating expenses, net of deferrals |
139 | 93 | 24 | 25 | 281 | |||||||||||||||
Amortization of deferred acquisition costs and intangibles |
33 | 2 | 2 | 3 | 40 | |||||||||||||||
Goodwill Impairment |
| | | 29 | 29 | |||||||||||||||
Interest expense |
3 | | 1 | 81 | 85 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total benefits and expenses |
206 | 95 | 60 | 138 | 499 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
20 | 19 | 102 | (143 | ) | (2 | ) | |||||||||||||
Provision (benefit) for income taxes |
2 | 7 | 54 | (102 | ) | (39 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME (LOSS) |
18 | 12 | 48 | (41 | ) | 37 | ||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
1 | | 3 | 19 | 23 | |||||||||||||||
Goodwill impairment, net of taxes |
| | | 19 | 19 | |||||||||||||||
Gain on sale of business, net of taxes |
| | (36 | ) | | (36 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OPERATING INCOME (LOSS) |
$ | 19 | $ | 12 | $ | 15 | $ | (3 | ) | $ | 43 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|||||||||||||||||||
Effective tax rate (operating income (loss)) |
7.4 | % | 36.2 | % | 45.9 | % | 96.7 | % | NM | (2) |
(1) | Includes inter-segment eliminations and non-core products. |
(2) | NM is defined as not meaningful for percentages greater than 200%. |
53
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2011
Net Operating Income (Loss)Corporate and Other Division
(amounts in millions)
Twelve months ended December 31, 2012 |
International Protection Segment |
Wealth Management Segment |
Runoff Segment | Corporate and Other(1) |
Total | |||||||||||||||
REVENUES: |
||||||||||||||||||||
Premiums |
$ | 682 | $ | | $ | 5 | $ | | $ | 687 | ||||||||||
Net investment income |
131 | | 145 | 30 | 306 | |||||||||||||||
Net investment gains (losses) |
6 | | 24 | (51 | ) | (21 | ) | |||||||||||||
Insurance and investment product fees and other |
3 | 390 | 207 | 120 | 720 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
822 | 390 | 381 | 99 | 1,692 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||
Benefits and other changes in policy reserves |
150 | | 37 | | 187 | |||||||||||||||
Interest credited |
| | 132 | | 132 | |||||||||||||||
Acquisition and operating expenses, net of deferrals |
483 | 278 | 79 | 151 | 991 | |||||||||||||||
Amortization of deferred acquisition costs and intangibles |
113 | 5 | 51 | 12 | 181 | |||||||||||||||
Goodwill impairment |
89 | | | | 89 | |||||||||||||||
Interest expense |
45 | | 1 | 308 | 354 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total benefits and expenses |
880 | 283 | 300 | 471 | 1,934 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
(58 | ) | 107 | 81 | (372 | ) | (242 | ) | ||||||||||||
Provision (benefit) for income taxes |
1 | 52 | 23 | (134 | ) | (58 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME (LOSS) |
(59 | ) | 55 | 58 | (238 | ) | (184 | ) | ||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(3 | ) | | (12 | ) | 33 | 18 | |||||||||||||
Goodwill impairment, net of taxes |
86 | | | | 86 | |||||||||||||||
Gain on sale of business, net of taxes |
| (13 | ) | | | (13 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OPERATING INCOME (LOSS) |
$ | 24 | $ | 42 | $ | 46 | $ | (205 | ) | $ | (93 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|||||||||||||||||||
Effective tax rate (operating income (loss)) |
9.4 | % | 38.2 | % | 27.1 | % | 36.2 | % | 43.2 | % | ||||||||||
Twelve months ended December 31, 2011 |
International Protection Segment |
Wealth Management Segment |
Runoff Segment | Corporate and Other(1) |
Total | |||||||||||||||
REVENUES: |
||||||||||||||||||||
Premiums |
$ | 839 | $ | | $ | 260 | $ | | $ | 1,099 | ||||||||||
Net investment income |
173 | | 140 | 32 | 345 | |||||||||||||||
Net investment gains (losses) |
(1 | ) | | (174 | ) | (60 | ) | (235 | ) | |||||||||||
Insurance and investment product fees and other |
11 | 453 | 299 | 40 | 803 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
1,022 | 453 | 525 | 12 | 2,012 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||
Benefits and other changes in policy reserves |
135 | | 234 | | 369 | |||||||||||||||
Interest credited |
| | 135 | | 135 | |||||||||||||||
Acquisition and operating expenses, net of deferrals |
590 | 372 | 142 | 50 | 1,154 | |||||||||||||||
Amortization of deferred acquisition costs and intangibles |
143 | 5 | 70 | 12 | 230 | |||||||||||||||
Goodwill Impairment |
| | | 29 | 29 | |||||||||||||||
Interest expense |
38 | | 2 | 331 | 371 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total benefits and expenses |
906 | 377 | 583 | 422 | 2,288 | |||||||||||||||
LOSS BEFORE INCOME TAXES |
116 | 76 | (58 | ) | (410 | ) | (276 | ) | ||||||||||||
Provision (benefit) for income taxes |
26 | 29 | (21 | ) | (133 | ) | (99 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET LOSS |
90 | 47 | (37 | ) | (277 | ) | (177 | ) | ||||||||||||
ADJUSTMENTS TO NET LOSS: |
||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
1 | | 100 | 38 | 139 | |||||||||||||||
Goodwill Impairment, net of taxes |
| | | 19 | 19 | |||||||||||||||
Gain on sale of business, net of taxes |
| | (36 | ) | | (36 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OPERATING INCOME (LOSS) |
$ | 91 | $ | 47 | $ | 27 | $ | (220 | ) | $ | (55 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|||||||||||||||||||
Effective tax rate (operating income (loss)) |
22.0 | % | 38.3 | % | -97.3 | % | 31.6 | % | 52.3 | % |
(1) | Includes inter-segment eliminations and non-core products. |
54
International Protection Segment
55
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income and SalesInternational Protection Segment
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 165 | $ | 164 | $ | 174 | $ | 179 | $ | 682 | $ | 192 | $ | 209 | $ | 223 | $ | 215 | $ | 839 | ||||||||||||||||||||
Net investment income |
27 | 32 | 36 | 36 | 131 | 34 | 38 | 53 | 48 | 173 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
3 | 1 | 1 | 1 | 6 | (2 | ) | (2 | ) | 1 | 2 | (1 | ) | |||||||||||||||||||||||||||
Insurance and investment product fees and other |
| 1 | | 2 | 3 | 2 | | 4 | 5 | 11 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenues |
195 | 198 | 211 | 218 | 822 | 226 | 245 | 281 | 270 | 1,022 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
38 | 30 | 41 | 41 | 150 | 31 | 37 | 35 | 32 | 135 | ||||||||||||||||||||||||||||||
Interest credited |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
113 | 117 | 126 | 127 | 483 | 139 | 143 | 156 | 152 | 590 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
28 | 27 | 27 | 31 | 113 | 33 | 32 | 42 | 36 | 143 | ||||||||||||||||||||||||||||||
Goodwill impairment |
| 89 | | | 89 | | | | | | ||||||||||||||||||||||||||||||
Interest expense |
9 | 11 | 14 | 11 | 45 | 3 | 6 | 16 | 13 | 38 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total benefits and expenses |
188 | 274 | 208 | 210 | 880 | 206 | 218 | 249 | 233 | 906 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
7 | (76 | ) | 3 | 8 | (58 | ) | 20 | 27 | 32 | 37 | 116 | ||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
(2 | ) | 1 | | 2 | 1 | 2 | 7 | 7 | 10 | 26 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET INCOME (LOSS) |
9 | (77 | ) | 3 | 6 | (59 | ) | 18 | 20 | 25 | 27 | 90 | ||||||||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(1 | ) | (1 | ) | | (1 | ) | (3 | ) | 1 | 2 | | (2 | ) | 1 | |||||||||||||||||||||||||
Goodwill impairment, net of taxes |
| 86 | | | 86 | | | | | | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NET OPERATING INCOME(1) |
$ | 8 | $ | 8 | $ | 3 | $ | 5 | $ | 24 | $ | 19 | $ | 22 | $ | 25 | $ | 25 | $ | 91 | ||||||||||||||||||||
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Effective tax rate (operating income) |
-46.6 | % | 32.8 | % | -5.8 | % | 23.1 | % | 9.4 | % | 7.4 | % | 28.7 | % | 20.9 | % | 26.3 | % | 22.0 | % | ||||||||||||||||||||
SALES: |
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Lifestyle Protection Insurance |
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Traditional indemnity premiums |
$ | 211 | $ | 212 | $ | 246 | $ | 228 | $ | 897 | $ | 234 | $ | 252 | $ | 270 | $ | 242 | $ | 998 | ||||||||||||||||||||
Premium equivalents for administrative services only business |
2 | 2 | 2 | 2 | 8 | 5 | 5 | 6 | 6 | 22 | ||||||||||||||||||||||||||||||
Reinsurance premiums assumed accounted for under the deposit method |
165 | 152 | 169 | 149 | 635 | 167 | 181 | 193 | 175 | 716 | ||||||||||||||||||||||||||||||
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Total Sales(2) |
$ | 378 | $ | 366 | $ | 417 | $ | 379 | $ | 1,540 | $ | 406 | $ | 438 | $ | 469 | $ | 423 | $ | 1,736 | ||||||||||||||||||||
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SALES BY REGION: |
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Lifestyle Protection Insurance |
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Northern Europe |
$ | 146 | $ | 145 | $ | 151 | $ | 141 | $ | 583 | $ | 149 | $ | 166 | $ | 169 | $ | 156 | $ | 640 | ||||||||||||||||||||
Southern Europe |
114 | 110 | 141 | 134 | 499 | 152 | 161 | 188 | 170 | 671 | ||||||||||||||||||||||||||||||
Latin America |
4 | 4 | 5 | 7 | 20 | 6 | 7 | 2 | | 15 | ||||||||||||||||||||||||||||||
Structured Deals(3) |
105 | 103 | 113 | 93 | 414 | 93 | 97 | 103 | 89 | 382 | ||||||||||||||||||||||||||||||
Other |
9 | 4 | 7 | 4 | 24 | 6 | 7 | 7 | 8 | 28 | ||||||||||||||||||||||||||||||
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Total Sales |
$ | 378 | $ | 366 | $ | 417 | $ | 379 | $ | 1,540 | $ | 406 | $ | 438 | $ | 469 | $ | 423 | $ | 1,736 | ||||||||||||||||||||
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Loss Ratio |
23 | % | 18 | % | 24 | % | 23 | % | 22 | % | 16 | % | 17 | % | 16 | % | 15 | % | 16 | % |
The loss ratio included above was calculated using whole dollars and may be different than the ratio calculated using the rounded numbers included herein.
(1) | Net operating income adjusted for foreign exchange as compared to the prior year period for the International Protection segment was $11 million and $32 million for the three and twelve months ended December 31, 2012, respectively. |
(2) | Sales adjusted for foreign exchange as compared to the prior year period for the International Protection segment were $394 million and $1,669 million for the three and twelve months ended December 31, 2012, respectively. |
(3) | Structured deals represent in-force blocks of business acquired through reinsurance arrangements and ongoing reciprocal arrangements in place with certain clients. |
56
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income (Pre-Deposit Accounting Basis)International Protection Segment
(amounts in millions)
4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | Total 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reported | Deposit Accounting Adjustments |
Pre-Deposit Accounting Basis |
Reported | Deposit Accounting Adjustments |
Pre-Deposit Accounting Basis |
Reported | Deposit Accounting Adjustments |
Pre-Deposit Accounting Basis |
Reported | Deposit Accounting Adjustments |
Pre-Deposit Accounting Basis |
Reported | Deposit Accounting Adjustments |
Pre-Deposit Accounting Basis |
||||||||||||||||||||||||||||||||||||||||||||||
REVENUES: |
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Premiums |
$ | 165 | $ | 50 | $ | 215 | $ | 164 | $ | 47 | $ | 211 | $ | 174 | $ | 56 | $ | 230 | $ | 179 | $ | 55 | $ | 234 | $ | 682 | $ | 208 | $ | 890 | ||||||||||||||||||||||||||||||
Net investment income |
27 | (5 | ) | 22 | 32 | (9 | ) | 23 | 36 | (12 | ) | 24 | 36 | (13 | ) | 23 | 131 | (39 | ) | 92 | ||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) |
3 | | 3 | 1 | | 1 | 1 | | 1 | 1 | | 1 | 6 | | 6 | |||||||||||||||||||||||||||||||||||||||||||||
Insurance and investment product fees and other |
| | | 1 | | 1 | | | | 2 | | 2 | 3 | | 3 | |||||||||||||||||||||||||||||||||||||||||||||
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Total revenues |
195 | 45 | 240 | 198 | 38 | 236 | 211 | 44 | 255 | 218 | 42 | 260 | 822 | 169 | 991 | |||||||||||||||||||||||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
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Benefits and other changes in policy reserves |
38 | 20 | 58 | 30 | 15 | 45 | 41 | 20 | 61 | 41 | 15 | 56 | 150 | 70 | 220 | |||||||||||||||||||||||||||||||||||||||||||||
Interest credited |
| | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
113 | 12 | 125 | 117 | 14 | 131 | 126 | 15 | 141 | 127 | 17 | 144 | 483 | 58 | 541 | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
28 | 13 | 41 | 27 | 11 | 38 | 27 | 13 | 40 | 31 | 14 | 45 | 113 | 51 | 164 | |||||||||||||||||||||||||||||||||||||||||||||
Goodwill impairment |
| | | 89 | | 89 | | | | | | | 89 | | 89 | |||||||||||||||||||||||||||||||||||||||||||||
Interest expense |
9 | | 9 | 11 | (2 | ) | 9 | 14 | (4 | ) | 10 | 11 | (4 | ) | 7 | 45 | (10 | ) | 35 | |||||||||||||||||||||||||||||||||||||||||
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Total benefits and expenses |
188 | 45 | 233 | 274 | 38 | 312 | 208 | 44 | 252 | 210 | 42 | 252 | 880 | 169 | 1,049 | |||||||||||||||||||||||||||||||||||||||||||||
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INCOME (LOSS) BEFORE INCOME TAXES |
7 | | 7 | (76 | ) | | (76 | ) | 3 | | 3 | 8 | | 8 | (58 | ) | | (58 | ) | |||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
(2 | ) | | (2 | ) | 1 | | 1 | | | | 2 | | 2 | 1 | | 1 | |||||||||||||||||||||||||||||||||||||||||||
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NET INCOME (LOSS) |
9 | | 9 | (77 | ) | | (77 | ) | 3 | | 3 | 6 | | 6 | (59 | ) | | (59 | ) | |||||||||||||||||||||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
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Net investment (gains) losses, net of taxes and other adjustments |
(1 | ) | | (1 | ) | (1 | ) | | (1 | ) | | | | (1 | ) | | (1 | ) | (3 | ) | | (3 | ) | |||||||||||||||||||||||||||||||||||||
Goodwill impairment, net of taxes |
| | | 86 | | 86 | | | | | | | 86 | | 86 | |||||||||||||||||||||||||||||||||||||||||||||
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NET OPERATING INCOME(1) |
$ | 8 | $ | | $ | 8 | $ | 8 | $ | | $ | 8 | $ | 3 | $ | | $ | 3 | $ | 5 | $ | | $ | 5 | $ | 24 | $ | | $ | 24 | ||||||||||||||||||||||||||||||
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Effective tax rate (operating income) |
-46.6 | % | -46.6 | % | 32.8 | % | 32.8 | % | -5.8 | % | -5.8 | % | 23.1 | % | 23.1 | % | 9.4 | % | 9.4 | % | ||||||||||||||||||||||||||||||||||||||||
Other Metrics: |
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Premiums |
$ | 165 | $ | 50 | $ | 215 | $ | 164 | $ | 47 | $ | 211 | $ | 174 | $ | 56 | $ | 230 | $ | 179 | $ | 55 | $ | 234 | $ | 682 | $ | 208 | $ | 890 | ||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
38 | 20 | 58 | 30 | 15 | 45 | 41 | 20 | 61 | 41 | 15 | 56 | 150 | 70 | 220 | |||||||||||||||||||||||||||||||||||||||||||||
Commissions(2), (3) |
80 | 9 | 89 | 79 | 12 | 91 | 83 | 13 | 96 | 85 | 14 | 99 | 327 | 48 | 375 | |||||||||||||||||||||||||||||||||||||||||||||
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Margin before profit sharing |
47 | 21 | 68 | 55 | 20 | 75 | 50 | 23 | 73 | 53 | 26 | 79 | 205 | 90 | 295 | |||||||||||||||||||||||||||||||||||||||||||||
Profit share(2) |
20 | 14 | 34 | 24 | 15 | 39 | 27 | 14 | 41 | 27 | 17 | 44 | 98 | 60 | 158 | |||||||||||||||||||||||||||||||||||||||||||||
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Underwriting profit(3) |
$ | 27 | $ | 7 | $ | 34 | $ | 31 | $ | 5 | $ | 36 | $ | 23 | $ | 9 | $ | 32 | $ | 26 | $ | 9 | $ | 35 | $ | 107 | $ | 30 | $ | 137 | ||||||||||||||||||||||||||||||
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Loss Ratio |
23 | % | 27 | % | 18 | % | 21 | % | 24 | % | 27 | % | 23 | % | 23 | % | 22 | % | 25 | % | ||||||||||||||||||||||||||||||||||||||||
Underwriting Margin(4) |
17 | % | 16 | % | 19 | % | 17 | % | 14 | % | 14 | % | 14 | % | 15 | % | 16 | % | 15 | % | ||||||||||||||||||||||||||||||||||||||||
Combined Ratio(5) |
108 | % | 104 | % | 160 | % | 144 | % | 111 | % | 105 | % | 111 | % | 105 | % | 122 | % | 114 | % |
This page is provided as supplemental analysis related to the lifestyle protection insurance business. This business has reinsurance agreements that do not qualify for risk transfer under GAAP. This analysis shows the income statement activity as if these reinsurance agreements, except for our reciprocal arrangements, were accounted for as reinsurance accounting ("pre-deposit accounting basis") and not as deposit accounting. There is no impact on net income available to Genworth Financial, Inc.'s common stockholders or to segment net operating income.
The ratios included above were calculated using whole dollars and may be different than the ratio calculated using the rounded numbers included herein.
(1) | Net operating income adjusted for foreign exchange as compared to the prior year period for the International Protection segment was $11 million and $32 million for the three and twelve months ended December 31, 2012, respectively. |
(2) | Commissions include commissions which are included above in acquisition and operating expenses, net of deferrals, and amortization of DAC. |
(3) | The prior period amounts have been re-presented to conform to the current period presentation. |
(4) | The underwriting margin is calculated as underwriting profit divided by net earned premiums. |
(5) | The combined ratio is calculated as benefits and other changes in policy reserves, commissions (including amortization of DAC), profit share and other operating expenses divided by net earned premiums. |
57
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income (Pre-Deposit Accounting Basis)International Protection Segment
(amounts in millions)
4Q 2011 | 3Q 2011 | 2Q 2011 | 1Q 2011 | Total 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reported | Deposit Accounting Adjustments |
Pre-Deposit Accounting Basis |
Reported | Deposit Accounting Adjustments |
Pre-Deposit Accounting Basis |
Reported | Deposit Accounting Adjustments |
Pre-Deposit Accounting Basis |
Reported | Deposit Accounting Adjustments |
Pre-Deposit Accounting Basis |
Reported | Deposit Accounting Adjustments |
Pre-Deposit Accounting Basis |
||||||||||||||||||||||||||||||||||||||||||||||
REVENUES: |
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Premiums |
$ | 192 | $ | 57 | $ | 249 | $ | 209 | $ | 71 | $ | 280 | $ | 223 | $ | 71 | $ | 294 | $ | 215 | $ | 56 | $ | 271 | $ | 839 | $ | 255 | $ | 1,094 | ||||||||||||||||||||||||||||||
Net investment income |
34 | (7 | ) | 27 | 38 | (11 | ) | 27 | 53 | (26 | ) | 27 | 48 | (23 | ) | 25 | 173 | (67 | ) | 106 | ||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) |
(2 | ) | | (2 | ) | (2 | ) | | (2 | ) | 1 | | 1 | 2 | | 2 | (1 | ) | | (1 | ) | |||||||||||||||||||||||||||||||||||||||
Insurance and investment product fees and other |
2 | | 2 | | | | 4 | | 4 | 5 | | 5 | 11 | | 11 | |||||||||||||||||||||||||||||||||||||||||||||
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Total revenues |
226 | 50 | 276 | 245 | 60 | 305 | 281 | 45 | 326 | 270 | 33 | 303 | 1,022 | 188 | 1,210 | |||||||||||||||||||||||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
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Benefits and other changes in policy reserves |
31 | 15 | 46 | 37 | 18 | 55 | 35 | 18 | 53 | 32 | 10 | 42 | 135 | 61 | 196 | |||||||||||||||||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
139 | 16 | 155 | 143 | 19 | 162 | 156 | 19 | 175 | 152 | 13 | 165 | 590 | 67 | 657 | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
33 | 13 | 46 | 32 | 21 | 53 | 42 | 16 | 58 | 36 | 17 | 53 | 143 | 67 | 210 | |||||||||||||||||||||||||||||||||||||||||||||
Interest expense |
3 | 6 | 9 | 6 | 2 | 8 | 16 | (8 | ) | 8 | 13 | (7 | ) | 6 | 38 | (7 | ) | 31 | ||||||||||||||||||||||||||||||||||||||||||
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Total benefits and expenses |
206 | 50 | 256 | 218 | 60 | 278 | 249 | 45 | 294 | 233 | 33 | 266 | 906 | 188 | 1,094 | |||||||||||||||||||||||||||||||||||||||||||||
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INCOME BEFORE INCOME TAXES |
20 | | 20 | 27 | | 27 | 32 | | 32 | 37 | | 37 | 116 | | 116 | |||||||||||||||||||||||||||||||||||||||||||||
Provision for income taxes |
2 | | 2 | 7 | | 7 | 7 | | 7 | 10 | | 10 | 26 | | 26 | |||||||||||||||||||||||||||||||||||||||||||||
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NET INCOME |
18 | | 18 | 20 | | 20 | 25 | | 25 | 27 | | 27 | 90 | | 90 | |||||||||||||||||||||||||||||||||||||||||||||
ADJUSTMENT TO NET INCOME: |
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Net investment (gains) losses, net of taxes and other adjustments |
1 | | 1 | 2 | | 2 | | | | (2 | ) | | (2 | ) | 1 | | 1 | |||||||||||||||||||||||||||||||||||||||||||
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NET OPERATING INCOME |
$ | 19 | $ | | $ | 19 | $ | 22 | $ | | $ | 22 | $ | 25 | $ | | $ | 25 | $ | 25 | $ | | $ | 25 | $ | 91 | $ | | $ | 91 | ||||||||||||||||||||||||||||||
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Effective tax rate (operating income) |
7.4 | % | 7.4 | % | 28.7 | % | 28.7 | % | 20.9 | % | 20.9 | % | 26.3 | % | 26.3 | % | 22.0 | % | 22.0 | % | ||||||||||||||||||||||||||||||||||||||||
Other Metrics: |
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Premiums |
$ | 192 | $ | 57 | $ | 249 | $ | 209 | $ | 71 | $ | 280 | $ | 223 | $ | 71 | $ | 294 | $ | 215 | $ | 56 | $ | 271 | $ | 839 | $ | 255 | $ | 1,094 | ||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
31 | 15 | 46 | 37 | 18 | 55 | 35 | 18 | 53 | 32 | 10 | 42 | 135 | 61 | 196 | |||||||||||||||||||||||||||||||||||||||||||||
Commissions(1) |
94 | 10 | 104 | 96 | 21 | 117 | 109 | 18 | 127 | 102 | 16 | 118 | 401 | 65 | 466 | |||||||||||||||||||||||||||||||||||||||||||||
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Margin before profit sharing |
67 | 32 | 99 | 76 | 32 | 108 | 79 | 35 | 114 | 81 | 30 | 111 | 303 | 129 | 432 | |||||||||||||||||||||||||||||||||||||||||||||
Profit share(1) |
26 | 18 | 44 | 28 | 18 | 46 | 35 | 18 | 53 | 37 | 14 | 51 | 126 | 68 | 194 | |||||||||||||||||||||||||||||||||||||||||||||
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Underwriting profit |
$ | 41 | $ | 14 | $ | 55 | $ | 48 | $ | 14 | $ | 62 | $ | 44 | $ | 17 | $ | 61 | $ | 44 | $ | 16 | $ | 60 | $ | 177 | $ | 61 | $ | 238 | ||||||||||||||||||||||||||||||
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Loss Ratio |
16 | % | 18 | % | 17 | % | 20 | % | 16 | % | 18 | % | 15 | % | 15 | % | 16 | % | 18 | % | ||||||||||||||||||||||||||||||||||||||||
Underwriting Margin(2) |
21 | % | 22 | % | 23 | % | 22 | % | 19 | % | 21 | % | 21 | % | 22 | % | 21 | % | 22 | % | ||||||||||||||||||||||||||||||||||||||||
Combined Ratio(3) |
106 | % | 99 | % | 100 | % | 96 | % | 104 | % | 97 | % | 101 | % | 96 | % | 103 | % | 97 | % |
This page is provided as supplemental analysis related to the lifestyle protection insurance business. This business has reinsurance agreements that do not qualify for risk transfer under GAAP. This analysis shows the income statement activity as if these reinsurance agreements, except for our reciprocal arrangements, were accounted for as reinsurance accounting (pre-deposit accounting basis) and not as deposit accounting. There is no impact on net income available to Genworth Financial, Inc.s common stockholders or to segment net operating income.
The ratios included above were calculated using whole dollars and may be different than the ratio calculated using the rounded numbers included herein.
(1) | Commissions include commissions which are included above in acquisition and operating expenses, net of deferrals, and amortization of DAC. |
(2) | The underwriting margin is calculated as underwriting profit divided by net earned premiums. |
(3) | The combined ratio is calculated as benefits and other changes in policy reserves, commissions (including amortization of DAC), profit share and other operating expenses divided by net earned premiums. |
58
Wealth Management Segment
59
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income, Sales and Assets Under ManagementWealth Management Segment
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
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Premiums |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||||
Net investment income |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Insurance and investment product fees and other |
74 | 82 | 122 | 112 | 390 | 114 | 115 | 114 | 110 | 453 | ||||||||||||||||||||||||||||||
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Total revenues |
74 | 82 | 122 | 112 | 390 | 114 | 115 | 114 | 110 | 453 | ||||||||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
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Benefits and other changes in policy reserves |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Interest credited |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
59 | 63 | 64 | 92 | 278 | 93 | 95 | 92 | 92 | 372 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
1 | 2 | 1 | 1 | 5 | 2 | 1 | 1 | 1 | 5 | ||||||||||||||||||||||||||||||
Interest expense |
| | | | | | | | | | ||||||||||||||||||||||||||||||
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Total benefits and expenses |
60 | 65 | 65 | 93 | 283 | 95 | 96 | 93 | 93 | 377 | ||||||||||||||||||||||||||||||
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INCOME BEFORE INCOME TAXES |
14 | 17 | 57 | 19 | 107 | 19 | 19 | 21 | 17 | 76 | ||||||||||||||||||||||||||||||
Provision for income taxes |
8 | 7 | 30 | 7 | 52 | 7 | 7 | 8 | 7 | 29 | ||||||||||||||||||||||||||||||
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NET INCOME |
6 | 10 | 27 | 12 | 55 | 12 | 12 | 13 | 10 | 47 | ||||||||||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME: |
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Net investment (gains) losses, net of taxes and other adjustments |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Gain on sale of business, net of taxes |
2 | | (15 | ) | | (13 | ) | | | | | | ||||||||||||||||||||||||||||
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NET OPERATING INCOME |
$ | 8 | $ | 10 | $ | 12 | $ | 12 | $ | 42 | $ | 12 | $ | 12 | $ | 13 | $ | 10 | $ | 47 | ||||||||||||||||||||
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Effective tax rate (operating income) |
41.9 | % | 38.5 | % | 35.3 | % | 37.9 | % | 38.2 | % | 36.2 | % | 38.9 | % | 36.4 | % | 42.3 | % | 38.3 | % | ||||||||||||||||||||
SALES: |
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Sales by Distribution Channel: |
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Independent Producers |
$ | 1,141 | $ | 1,099 | $ | 1,228 | $ | 1,344 | $ | 4,812 | $ | 1,278 | $ | 1,395 | $ | 1,622 | $ | 1,785 | $ | 6,080 | ||||||||||||||||||||
Dedicated Sales Specialists |
| | | 172 | 172 | 161 | 170 | 185 | 273 | 789 | ||||||||||||||||||||||||||||||
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Total Sales |
$ | 1,141 | $ | 1,099 | $ | 1,228 | $ | 1,516 | $ | 4,984 | $ | 1,439 | $ | 1,565 | $ | 1,807 | $ | 2,058 | $ | 6,869 | ||||||||||||||||||||
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ASSETS UNDER MANAGEMENT: |
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Beginning of period |
$ | 22,633 | $ | 22,320 | $ | 25,684 | $ | 25,087 | $ | 25,087 | $ | 24,613 | $ | 25,930 | $ | 25,551 | $ | 24,740 | $ | 24,740 | ||||||||||||||||||||
Gross flows |
1,141 | 1,099 | 1,228 | 1,516 | 4,984 | 1,439 | 1,565 | 1,807 | 2,058 | 6,869 | ||||||||||||||||||||||||||||||
Redemptions |
(1,514 | ) | (1,353 | ) | (1,473 | ) | (1,875 | ) | (6,215 | ) | (1,455 | ) | (1,119 | ) | (1,143 | ) | (1,703 | ) | (5,420 | ) | ||||||||||||||||||||
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Net flows |
(373 | ) | (254 | ) | (245 | ) | (359 | ) | (1,231 | ) | (16 | ) | 446 | 664 | 355 | 1,449 | ||||||||||||||||||||||||
Market performance |
89 | 567 | (348 | ) | 956 | 1,264 | 490 | (1,763 | ) | (285 | ) | 456 | (1,102 | ) | ||||||||||||||||||||||||||
Disposition(1) |
| | (2,771 | ) | | (2,771 | ) | | | | | | ||||||||||||||||||||||||||||
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End of period |
$ | 22,349 | $ | 22,633 | $ | 22,320 | $ | 25,684 | $ | 22,349 | $ | 25,087 | $ | 24,613 | $ | 25,930 | $ | 25,551 | $ | 25,087 | ||||||||||||||||||||
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Wealth Management results represent Genworth Financial Wealth Management, Inc. (GFIS), Genworth Financial Investment Services, Inc., Genworth Financial Trust Company, Centurion Financial Advisers, Inc., Quantavis Consulting, Inc. and the Altegris companies.
(1) | On April 2, 2012, we completed the sale of our tax and accounting financial advisor unit, GFIS. Assets under management at the time of the sale were $2,771 million. |
60
Runoff Segment
61
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating Income (Loss)Runoff Segment
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
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Premiums |
$ | 1 | $ | 1 | $ | 2 | $ | 1 | $ | 5 | $ | 2 | $ | 89 | $ | 84 | $ | 85 | $ | 260 | ||||||||||||||||||||
Net investment income |
37 | 34 | 36 | 38 | 145 | 36 | 33 | 37 | 34 | 140 | ||||||||||||||||||||||||||||||
Net investment gains (losses) |
2 | 5 | (25 | ) | 42 | 24 | (4 | ) | (159 | ) | (11 | ) | | (174 | ) | |||||||||||||||||||||||||
Insurance and investment product fees and other |
52 | 52 | 51 | 52 | 207 | 128 | 55 | 57 | 59 | 299 | ||||||||||||||||||||||||||||||
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Total revenues |
92 | 92 | 64 | 133 | 381 | 162 | 18 | 167 | 178 | 525 | ||||||||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
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Benefits and other changes in policy reserves |
13 | 9 | 14 | 1 | 37 | 1 | 86 | 69 | 78 | 234 | ||||||||||||||||||||||||||||||
Interest credited |
32 | 33 | 34 | 33 | 132 | 32 | 34 | 34 | 35 | 135 | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
21 | 18 | 21 | 19 | 79 | 24 | 35 | 37 | 46 | 142 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
20 | 18 | 17 | (4 | ) | 51 | 2 | 32 | 20 | 16 | 70 | |||||||||||||||||||||||||||||
Interest expense |
| | 1 | | 1 | 1 | | 1 | | 2 | ||||||||||||||||||||||||||||||
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Total benefits and expenses |
86 | 78 | 87 | 49 | 300 | 60 | 187 | 161 | 175 | 583 | ||||||||||||||||||||||||||||||
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INCOME (LOSS) BEFORE INCOME TAXES |
6 | 14 | (23 | ) | 84 | 81 | 102 | (169 | ) | 6 | 3 | (58 | ) | |||||||||||||||||||||||||||
Provision (benefit) for income taxes |
| 3 | (2 | ) | 22 | 23 | 54 | (70 | ) | (6 | ) | 1 | (21 | ) | ||||||||||||||||||||||||||
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NET INCOME (LOSS) |
6 | 11 | (21 | ) | 62 | 58 | 48 | (99 | ) | 12 | 2 | (37 | ) | |||||||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME (LOSS): |
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Net investment (gains) losses, net of taxes and other adjustments |
2 | (2 | ) | 15 | (27 | ) | (12 | ) | 3 | 92 | 6 | (1 | ) | 100 | ||||||||||||||||||||||||||
Gain on sale of business, net of taxes |
| | | | | (36 | ) | | | | (36 | ) | ||||||||||||||||||||||||||||
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NET OPERATING INCOME (LOSS) |
$ | 8 | $ | 9 | $ | (6 | ) | $ | 35 | $ | 46 | $ | 15 | $ | (7 | ) | $ | 18 | $ | 1 | $ | 27 | ||||||||||||||||||
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Effective tax rate (operating income (loss)) |
18.4 | % | 19.0 | % | NM | (1) | 16.9 | % | 27.1 | % | 45.9 | % | 76.0 | % | -28.8 | % | 17.0 | % | -97.3 | % |
(1) | NM is defined as not meaningful for percentages greater than 200%. |
62
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Selected Operating Performance MeasuresRunoff Segment
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
Variable Annuities: |
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Income Distribution Series |
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Account value, beginning of the period |
$ | 6,261 | $ | 6,229 | $ | 6,398 | $ | 6,265 | $ | 6,265 | $ | 6,148 | $ | 6,606 | $ | 6,687 | $ | 6,590 | $ | 6,590 | ||||||||||||||||||||
Deposits |
22 | 17 | 20 | 26 | 85 | 23 | 30 | 33 | 117 | 203 | ||||||||||||||||||||||||||||||
Surrenders, benefits and product charges |
(184 | ) | (184 | ) | (168 | ) | (174 | ) | (710 | ) | (159 | ) | (171 | ) | (171 | ) | (185 | ) | (686 | ) | ||||||||||||||||||||
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Net flows |
(162 | ) | (167 | ) | (148 | ) | (148 | ) | (625 | ) | (136 | ) | (141 | ) | (138 | ) | (68 | ) | (483 | ) | ||||||||||||||||||||
Interest credited and investment performance |
42 | 199 | (21 | ) | 281 | 501 | 253 | (317 | ) | 57 | 165 | 158 | ||||||||||||||||||||||||||||
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Account value, end of the period |
6,141 | 6,261 | 6,229 | 6,398 | 6,141 | 6,265 | 6,148 | 6,606 | 6,687 | 6,265 | ||||||||||||||||||||||||||||||
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Traditional Variable Annuities |
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Account value, net of reinsurance, beginning of the period |
1,715 | 1,703 | 1,819 | 1,766 | 1,766 | 1,735 | 2,012 | 2,096 | 2,078 | 2,078 | ||||||||||||||||||||||||||||||
Deposits |
3 | 4 | 3 | 3 | 13 | 3 | 4 | 3 | 17 | 27 | ||||||||||||||||||||||||||||||
Surrenders, benefits and product charges |
(84 | ) | (72 | ) | (81 | ) | (89 | ) | (326 | ) | (82 | ) | (73 | ) | (100 | ) | (88 | ) | (343 | ) | ||||||||||||||||||||
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Net flows |
(81 | ) | (68 | ) | (78 | ) | (86 | ) | (313 | ) | (79 | ) | (69 | ) | (97 | ) | (71 | ) | (316 | ) | ||||||||||||||||||||
Interest credited and investment performance |
28 | 80 | (38 | ) | 139 | 209 | 110 | (208 | ) | 13 | 89 | 4 | ||||||||||||||||||||||||||||
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Account value, net of reinsurance, end of the period |
1,662 | 1,715 | 1,703 | 1,819 | 1,662 | 1,766 | 1,735 | 2,012 | 2,096 | 1,766 | ||||||||||||||||||||||||||||||
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Variable Life Insurance |
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Account value, beginning of the period |
294 | 293 | 305 | 284 | 284 | 272 | 314 | 319 | 313 | 313 | ||||||||||||||||||||||||||||||
Deposits |
2 | 2 | 2 | 3 | 9 | 2 | 3 | 3 | 3 | 11 | ||||||||||||||||||||||||||||||
Surrenders, benefits and product charges |
(9 | ) | (12 | ) | (10 | ) | (8 | ) | (39 | ) | (8 | ) | (12 | ) | (11 | ) | (11 | ) | (42 | ) | ||||||||||||||||||||
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Net flows |
(7 | ) | (10 | ) | (8 | ) | (5 | ) | (30 | ) | (6 | ) | (9 | ) | (8 | ) | (8 | ) | (31 | ) | ||||||||||||||||||||
Interest credited and investment performance |
5 | 11 | (4 | ) | 26 | 38 | 18 | (33 | ) | 3 | 14 | 2 | ||||||||||||||||||||||||||||
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Account value, end of the period |
292 | 294 | 293 | 305 | 292 | 284 | 272 | 314 | 319 | 284 | ||||||||||||||||||||||||||||||
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Total Variable Annuities |
$ | 8,095 | $ | 8,270 | $ | 8,225 | $ | 8,522 | $ | 8,095 | $ | 8,315 | $ | 8,155 | $ | 8,932 | $ | 9,102 | $ | 8,315 | ||||||||||||||||||||
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Guaranteed Investment Contracts, Funding Agreements Backing Notes and Funding Agreements: |
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Account value, beginning of period |
$ | 2,297 | $ | 2,221 | $ | 2,594 | $ | 2,623 | $ | 2,623 | $ | 2,717 | $ | 3,043 | $ | 3,317 | $ | 3,717 | $ | 3,717 | ||||||||||||||||||||
Deposits |
| 84 | | | 84 | | | | | | ||||||||||||||||||||||||||||||
Surrenders and benefits |
(164 | ) | (26 | ) | (385 | ) | (55 | ) | (630 | ) | (111 | ) | (341 | ) | (312 | ) | (435 | ) | (1,199 | ) | ||||||||||||||||||||
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Net flows |
(164 | ) | 58 | (385 | ) | (55 | ) | (546 | ) | (111 | ) | (341 | ) | (312 | ) | (435 | ) | (1,199 | ) | |||||||||||||||||||||
Interest credited |
17 | 17 | 18 | 21 | 73 | 21 | 24 | 28 | 33 | 106 | ||||||||||||||||||||||||||||||
Foreign currency translation |
3 | 1 | (6 | ) | 5 | 3 | (4 | ) | (9 | ) | 10 | 2 | (1 | ) | ||||||||||||||||||||||||||
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Account value, end of period |
$ | 2,153 | $ | 2,297 | $ | 2,221 | $ | 2,594 | $ | 2,153 | $ | 2,623 | $ | 2,717 | $ | 3,043 | $ | 3,317 | $ | 2,623 | ||||||||||||||||||||
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63
Corporate and Other
64
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Operating LossCorporate and Other(1)
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
REVENUES: |
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Premiums |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||||
Net investment income |
11 | 3 | 16 | | 30 | 13 | 2 | 18 | (1 | ) | 32 | |||||||||||||||||||||||||||||
Net investment gains (losses) |
(12 | ) | (4 | ) | | (35 | ) | (51 | ) | (32 | ) | (11 | ) | (3 | ) | (14 | ) | (60 | ) | |||||||||||||||||||||
Insurance and investment product fees and other |
40 | 35 | 24 | 21 | 120 | 14 | 13 | 6 | 7 | 40 | ||||||||||||||||||||||||||||||
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Total revenues |
39 | 34 | 40 | (14 | ) | 99 | (5 | ) | 4 | 21 | (8 | ) | 12 | |||||||||||||||||||||||||||
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BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Interest credited |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
59 | 34 | 28 | 30 | 151 | 25 | 14 | 9 | 2 | 50 | ||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
3 | 3 | 3 | 3 | 12 | 3 | 3 | 3 | 3 | 12 | ||||||||||||||||||||||||||||||
Goodwill impairment |
| | | | | 29 | | | | 29 | ||||||||||||||||||||||||||||||
Interest expense |
80 | 82 | 84 | 62 | 308 | 81 | 82 | 86 | 82 | 331 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total benefits and expenses |
142 | 119 | 115 | 95 | 471 | 138 | 99 | 98 | 87 | 422 | ||||||||||||||||||||||||||||||
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LOSS BEFORE INCOME TAXES |
(103 | ) | (85 | ) | (75 | ) | (109 | ) | (372 | ) | (143 | ) | (95 | ) | (77 | ) | (95 | ) | (410 | ) | ||||||||||||||||||||
Provision (benefit) for income taxes |
(31 | ) | (35 | ) | (31 | ) | (37 | ) | (134 | ) | (102 | ) | (30 | ) | 17 | (18 | ) | (133 | ) | |||||||||||||||||||||
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|||||||||||||||||||||
NET LOSS |
(72 | ) | (50 | ) | (44 | ) | (72 | ) | (238 | ) | (41 | ) | (65 | ) | (94 | ) | (77 | ) | (277 | ) | ||||||||||||||||||||
ADJUSTMENTS TO NET LOSS: |
||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
8 | 2 | | 23 | 33 | 19 | 9 | 2 | 8 | 38 | ||||||||||||||||||||||||||||||
Goodwill impairment, net of taxes |
| | | | | 19 | | | | 19 | ||||||||||||||||||||||||||||||
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NET OPERATING LOSS |
$ | (64 | ) | $ | (48 | ) | $ | (44 | ) | $ | (49 | ) | $ | (205 | ) | $ | (3 | ) | $ | (56 | ) | $ | (92 | ) | $ | (69 | ) | $ | (220 | ) | ||||||||||
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Effective tax rate (operating loss) |
29.7 | % | 40.1 | % | 41.8 | % | 34.1 | % | 36.2 | % | 96.7 | % | 31.8 | % | -23.8 | % | 15.5 | % | 31.6 | % |
(1) | Includes inter-segment eliminations and non-core products. |
65
66
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
(amounts in millions)
December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||||||||||
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
|||||||||||||||||||||||||||||||||
Composition of Investment Portfolio |
||||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: |
||||||||||||||||||||||||||||||||||||||||||
Investment grade: |
||||||||||||||||||||||||||||||||||||||||||
Public fixed maturity securities |
$ | 37,207 | 48 | % | $ | 37,335 | 48 | % | $ | 35,553 | 46 | % | $ | 34,598 | 46 | % | $ | 34,770 | 46 | % | ||||||||||||||||||||||
Private fixed maturity securities |
10,484 | 13 | 10,306 | 13 | 10,119 | 13 | 9,992 | 13 | 9,480 | 12 | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities(1) |
5,532 | 7 | 5,489 | 7 | 5,377 | 7 | 5,250 | 7 | 5,129 | 7 | ||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities |
2,947 | 4 | 2,902 | 4 | 2,900 | 4 | 2,987 | 4 | 3,045 | 4 | ||||||||||||||||||||||||||||||||
Other asset-backed securities |
2,583 | 3 | 2,685 | 3 | 2,531 | 3 | 2,396 | 3 | 2,516 | 3 | ||||||||||||||||||||||||||||||||
Tax-exempt |
294 | | 302 | | 310 | 1 | 341 | 1 | 503 | 1 | ||||||||||||||||||||||||||||||||
Non-investment grade fixed maturity securities |
3,114 | 4 | 3,195 | 4 | 3,001 | 4 | 2,968 | 4 | 2,852 | 4 | ||||||||||||||||||||||||||||||||
Equity securities: |
||||||||||||||||||||||||||||||||||||||||||
Common stocks and mutual funds |
431 | 1 | 410 | 1 | 374 | 1 | 384 | 1 | 306 | | ||||||||||||||||||||||||||||||||
Preferred stocks |
87 | | 114 | | 57 | | 50 | | 55 | | ||||||||||||||||||||||||||||||||
Commercial mortgage loans |
5,872 | 8 | 5,861 | 8 | 5,875 | 8 | 6,030 | 8 | 6,092 | 8 | ||||||||||||||||||||||||||||||||
Restricted commercial mortgage loans related to securitization entities |
341 | | 359 | | 382 | | 392 | 1 | 411 | 1 | ||||||||||||||||||||||||||||||||
Policy loans |
1,601 | 2 | 1,626 | 2 | 1,619 | 2 | 1,555 | 2 | 1,549 | 2 | ||||||||||||||||||||||||||||||||
Cash, cash equivalents and short-term investments |
3,918 | 5 | 3,875 | 5 | 4,150 | 5 | 4,404 | 6 | 5,145 | 7 | ||||||||||||||||||||||||||||||||
Securities lending |
187 | | 181 | | 175 | | 93 | | 406 | 1 | ||||||||||||||||||||||||||||||||
Other invested assets: |
Limited partnerships |
339 | | 344 | | 357 | | 352 | | 344 | | |||||||||||||||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||||||||||||||||||
Long-term care (LTC) forward starting swapcash flow |
466 | 1 | 614 | 1 | 801 | 1 | 252 | | 648 | 1 | ||||||||||||||||||||||||||||||||
Other cash flow |
3 | | 1 | | 3 | | 1 | | | | ||||||||||||||||||||||||||||||||
Fair value |
43 | | 48 | | 54 | | 69 | | 75 | | ||||||||||||||||||||||||||||||||
Equity index optionsnon-qualified |
25 | | 24 | | 31 | | 21 | | 55 | | ||||||||||||||||||||||||||||||||
Other non-qualified |
612 | 1 | 697 | 1 | 710 | 1 | 516 | 1 | 707 | 1 | ||||||||||||||||||||||||||||||||
Trading portfolio | 566 | 1 | 690 | 1 | 752 | 1 | 770 | 1 | 788 | 1 | ||||||||||||||||||||||||||||||||
Counterparty collateral | 840 | 1 | 1,010 | 1 | 1,218 | 2 | 589 | 1 | 1,023 | 1 | ||||||||||||||||||||||||||||||||
Restricted other invested assets related to securitization entities | 393 | 1 | 393 | 1 | 391 | 1 | 384 | 1 | 377 | | ||||||||||||||||||||||||||||||||
Other |
157 | | 173 | | 135 | | 121 | | 116 | | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total invested assets and cash |
$ | 78,042 | 100 | % | $ | 78,634 | 100 | % | $ | 76,875 | 100 | % | $ | 74,515 | 100 | % | $ | 76,392 | 100 | % | ||||||||||||||||||||||
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Public Fixed Maturity SecuritiesCredit Quality: |
||||||||||||||||||||||||||||||||||||||||||
NRSRO (2) Designation | ||||||||||||||||||||||||||||||||||||||||||
AAA |
$ | 17,372 | 36 | % | $ | 17,864 | 37 | % | $ | 17,055 | 37 | % | $ | 16,612 | 37 | % | $ | 17,179 | 38 | % | ||||||||||||||||||||||
AA |
4,746 | 10 | 4,709 | 10 | 4,498 | 10 | 4,574 | 10 | 4,666 | 10 | ||||||||||||||||||||||||||||||||
A |
13,238 | 28 | 13,311 | 28 | 13,083 | 28 | 12,542 | 28 | 12,577 | 28 | ||||||||||||||||||||||||||||||||
BBB |
10,567 | 22 | 10,372 | 21 | 9,759 | 21 | 9,638 | 21 | 9,334 | 21 | ||||||||||||||||||||||||||||||||
BB |
1,296 | 3 | 1,280 | 3 | 1,205 | 3 | 1,173 | 3 | 1,102 | 2 | ||||||||||||||||||||||||||||||||
B |
147 | | 145 | | 160 | | 150 | | 142 | | ||||||||||||||||||||||||||||||||
CCC and lower |
397 | 1 | 456 | 1 | 408 | 1 | 424 | 1 | 420 | 1 | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total public fixed maturity securities |
$ | 47,763 | 100 | % | $ | 48,137 | 100 | % | $ | 46,168 | 100 | % | $ | 45,113 | 100 | % | $ | 45,420 | 100 | % | ||||||||||||||||||||||
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Private Fixed Maturity SecuritiesCredit Quality: |
||||||||||||||||||||||||||||||||||||||||||
NRSRO(2) Designation |
||||||||||||||||||||||||||||||||||||||||||
AAA |
$ | 1,427 | 10 | % | $ | 1,657 | 12 | % | $ | 1,649 | 12 | % | $ | 1,581 | 12 | % | $ | 1,754 | 14 | % | ||||||||||||||||||||||
AA |
1,521 | 11 | 1,349 | 10 | 1,170 | 9 | 1,122 | 8 | 1,079 | 8 | ||||||||||||||||||||||||||||||||
A |
4,338 | 30 | 4,164 | 29 | 4,238 | 31 | 4,290 | 32 | 3,993 | 31 | ||||||||||||||||||||||||||||||||
BBB |
5,838 | 41 | 5,593 | 40 | 5,338 | 39 | 5,205 | 39 | 4,861 | 38 | ||||||||||||||||||||||||||||||||
BB |
929 | 6 | 974 | 7 | 906 | 7 | 966 | 7 | 929 | 7 | ||||||||||||||||||||||||||||||||
B |
194 | 1 | 187 | 1 | 171 | 1 | 119 | 1 | 125 | 1 | ||||||||||||||||||||||||||||||||
CCC and lower |
151 | 1 | 153 | 1 | 151 | 1 | 136 | 1 | 134 | 1 | ||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
Total private fixed maturity securities |
$ | 14,398 | 100 | % | $ | 14,077 | 100 | % | $ | 13,623 | 100 | % | $ | 13,419 | 100 | % | $ | 12,875 | 100 | % | ||||||||||||||||||||||
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(1) | The company does not have any material exposure to residential mortgage-backed securities collateralized debt obligations (CDOs). |
(2) | Nationally Recognized Statistical Rating Organizations. |
67
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Fixed Maturity Securities Summary
(amounts in millions)
December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||||||||
Fair Value | % of Total | Fair Value | % of Total | Fair Value | % of Total | Fair Value | % of Total | Fair Value | % of Total | |||||||||||||||||||||||||||||||
Fixed Maturity SecuritiesSecurity Sector: |
||||||||||||||||||||||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises |
$ | 5,491 | 9 | % | $ | 5,503 | 9 | % | $ | 4,985 | 8 | % | $ | 4,574 | 8 | % | $ | 4,863 | 8 | % | ||||||||||||||||||||
Tax-exempt |
294 | 1 | 302 | 1 | 310 | 1 | 341 | | 503 | 1 | ||||||||||||||||||||||||||||||
Foreign government |
2,422 | 4 | 2,574 | 4 | 2,505 | 4 | 2,291 | 4 | 2,211 | 4 | ||||||||||||||||||||||||||||||
U.S. corporate |
26,105 | 42 | 26,306 | 42 | 25,545 | 43 | 25,207 | 43 | 25,258 | 43 | ||||||||||||||||||||||||||||||
Foreign corporate |
15,792 | 25 | 15,368 | 25 | 14,585 | 24 | 14,442 | 25 | 13,757 | 24 | ||||||||||||||||||||||||||||||
Residential mortgage-backed securities |
6,081 | 10 | 6,119 | 10 | 5,976 | 10 | 5,852 | 10 | 5,695 | 10 | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities |
3,333 | 5 | 3,286 | 5 | 3,268 | 6 | 3,346 | 6 | 3,400 | 6 | ||||||||||||||||||||||||||||||
Other asset-backed securities |
2,643 | 4 | 2,756 | 4 | 2,617 | 4 | 2,479 | 4 | 2,608 | 4 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total fixed maturity securities |
$ | 62,161 | 100 | % | $ | 62,214 | 100 | % | $ | 59,791 | 100 | % | $ | 58,532 | 100 | % | $ | 58,295 | 100 | % | ||||||||||||||||||||
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|||||||||||||||||||||
Corporate Bond HoldingsIndustry Sector: |
||||||||||||||||||||||||||||||||||||||||
Investment Grade: |
||||||||||||||||||||||||||||||||||||||||
Finance and insurance |
$ | 7,820 | 20 | % | $ | 8,063 | 20 | % | $ | 8,028 | 21 | % | $ | 8,138 | 21 | % | $ | 7,919 | 21 | % | ||||||||||||||||||||
Utilities and energy |
9,432 | 24 | 9,265 | 23 | 8,965 | 23 | 8,752 | 23 | 8,653 | 23 | ||||||||||||||||||||||||||||||
Consumernon-cyclical |
5,027 | 13 | 5,065 | 13 | 4,917 | 13 | 4,778 | 13 | 4,662 | 12 | ||||||||||||||||||||||||||||||
Consumercyclical |
2,272 | 6 | 2,222 | 6 | 2,249 | 6 | 2,183 | 6 | 2,088 | 6 | ||||||||||||||||||||||||||||||
Capital goods |
2,515 | 6 | 2,515 | 6 | 2,413 | 6 | 2,345 | 6 | 2,388 | 6 | ||||||||||||||||||||||||||||||
Industrial |
2,511 | 6 | 2,434 | 6 | 2,341 | 6 | 2,267 | 6 | 2,149 | 6 | ||||||||||||||||||||||||||||||
Technology and communications |
2,966 | 7 | 2,792 | 7 | 2,629 | 7 | 2,630 | 7 | 2,522 | 7 | ||||||||||||||||||||||||||||||
Transportation |
1,588 | 4 | 1,566 | 4 | 1,454 | 4 | 1,435 | 4 | 1,445 | 4 | ||||||||||||||||||||||||||||||
Other |
5,793 | 14 | 5,786 | 15 | 5,322 | 14 | 5,331 | 14 | 5,520 | 15 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Subtotal |
39,924 | 100 | % | 39,708 | 100 | % | 38,318 | 100 | % | 37,859 | 100 | % | 37,346 | 100 | % | |||||||||||||||||||||||||
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Non-Investment Grade: |
||||||||||||||||||||||||||||||||||||||||
Finance and insurance |
454 | 23 | % | 460 | 23 | % | 414 | 23 | % | 348 | 20 | % | 290 | 17 | % | |||||||||||||||||||||||||
Utilities and energy |
406 | 21 | 429 | 22 | 381 | 21 | 396 | 22 | 340 | 21 | ||||||||||||||||||||||||||||||
Consumernon-cyclical |
171 | 9 | 160 | 8 | 135 | 7 | 142 | 8 | 132 | 8 | ||||||||||||||||||||||||||||||
Consumercyclical |
110 | 5 | 95 | 5 | 76 | 4 | 76 | 4 | 72 | 4 | ||||||||||||||||||||||||||||||
Capital goods |
257 | 13 | 287 | 14 | 310 | 17 | 303 | 17 | 303 | 18 | ||||||||||||||||||||||||||||||
Industrial |
318 | 16 | 290 | 15 | 269 | 15 | 280 | 16 | 286 | 17 | ||||||||||||||||||||||||||||||
Technology and communications |
186 | 9 | 171 | 9 | 140 | 8 | 165 | 9 | 159 | 10 | ||||||||||||||||||||||||||||||
Transportation |
55 | 3 | 58 | 3 | 59 | 3 | 60 | 3 | 68 | 4 | ||||||||||||||||||||||||||||||
Other |
16 | 1 | 16 | 1 | 28 | 2 | 20 | 1 | 19 | 1 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Subtotal |
1,973 | 100 | % | 1,966 | 100 | % | 1,812 | 100 | % | 1,790 | 100 | % | 1,669 | 100 | % | |||||||||||||||||||||||||
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|||||||||||||||||||||
Total |
$ | 41,897 | 100 | % | $ | 41,674 | 100 | % | $ | 40,130 | 100 | % | $ | 39,649 | 100 | % | $ | 39,015 | 100 | % | ||||||||||||||||||||
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|||||||||||||||||||||
Fixed Maturity SecuritiesContractual Maturity Dates: |
||||||||||||||||||||||||||||||||||||||||
Due in one year or less |
$ | 2,634 | 4 | % | $ | 3,097 | 5 | % | $ | 3,054 | 5 | % | $ | 2,958 | 5 | % | $ | 2,756 | 5 | % | ||||||||||||||||||||
Due after one year through five years |
11,139 | 18 | 11,162 | 18 | 10,765 | 18 | 11,183 | 19 | 11,225 | 19 | ||||||||||||||||||||||||||||||
Due after five years through ten years |
12,266 | 20 | 12,009 | 19 | 11,569 | 19 | 11,066 | 19 | 10,472 | 18 | ||||||||||||||||||||||||||||||
Due after ten years |
24,065 | 39 | 23,785 | 38 | 22,542 | 38 | 21,648 | 37 | 22,139 | 38 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Subtotal |
50,104 | 81 | 50,053 | 80 | 47,930 | 80 | 46,855 | 80 | 46,592 | 80 | ||||||||||||||||||||||||||||||
Mortgage and asset-backed securities |
12,057 | 19 | 12,161 | 20 | 11,861 | 20 | 11,677 | 20 | 11,703 | 20 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total fixed maturity securities |
$ | 62,161 | 100 | % | $ | 62,214 | 100 | % | $ | 59,791 | 100 | % | $ | 58,532 | 100 | % | $ | 58,295 | 100 | % | ||||||||||||||||||||
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|||||||||||||||||||||
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68
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Commercial Mortgage Loans Summary
(amounts in millions)
December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||||||||
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
|||||||||||||||||||||||||||||||
Geographic Region |
||||||||||||||||||||||||||||||||||||||||
South Atlantic |
$ | 1,587 | 27 | % | $ | 1,619 | 27 | % | $ | 1,640 | 28 | % | $ | 1,629 | 27 | % | $ | 1,631 | 27 | % | ||||||||||||||||||||
Pacific |
1,553 | 26 | 1,526 | 26 | 1,486 | 25 | 1,504 | 25 | 1,539 | 25 | ||||||||||||||||||||||||||||||
Middle Atlantic |
739 | 13 | 710 | 12 | 715 | 12 | 750 | 12 | 734 | 12 | ||||||||||||||||||||||||||||||
East North Central |
468 | 8 | 513 | 9 | 528 | 9 | 544 | 9 | 557 | 9 | ||||||||||||||||||||||||||||||
Mountain |
463 | 8 | 442 | 7 | 461 | 8 | 482 | 8 | 497 | 8 | ||||||||||||||||||||||||||||||
New England |
343 | 6 | 342 | 6 | 344 | 6 | 385 | 6 | 388 | 6 | ||||||||||||||||||||||||||||||
West North Central |
353 | 6 | 339 | 6 | 320 | 5 | 332 | 5 | 337 | 5 | ||||||||||||||||||||||||||||||
West South Central |
265 | 4 | 260 | 4 | 269 | 4 | 293 | 5 | 298 | 5 | ||||||||||||||||||||||||||||||
East South Central |
141 | 2 | 152 | 3 | 155 | 3 | 157 | 3 | 159 | 3 | ||||||||||||||||||||||||||||||
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Subtotal |
5,912 | 100 | % | 5,903 | 100 | % | 5,918 | 100 | % | 6,076 | 100 | % | 6,140 | 100 | % | |||||||||||||||||||||||||
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Allowance for losses |
(42 | ) | (44 | ) | (46 | ) | (49 | ) | (51 | ) | ||||||||||||||||||||||||||||||
Unamortized fees and costs |
2 | 2 | 3 | 3 | 3 | |||||||||||||||||||||||||||||||||||
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Total |
$ | 5,872 | $ | 5,861 | $ | 5,875 | $ | 6,030 | $ | 6,092 | ||||||||||||||||||||||||||||||
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Property Type |
||||||||||||||||||||||||||||||||||||||||
Retail |
$ | 1,895 | 32 | % | $ | 1,882 | 32 | % | $ | 1,899 | 32 | % | $ | 1,907 | 31 | % | $ | 1,898 | 31 | % | ||||||||||||||||||||
Industrial |
1,603 | 27 | 1,633 | 27 | 1,623 | 27 | 1,688 | 28 | 1,707 | 28 | ||||||||||||||||||||||||||||||
Office |
1,580 | 27 | 1,533 | 26 | 1,520 | 26 | 1,553 | 26 | 1,590 | 26 | ||||||||||||||||||||||||||||||
Apartments |
552 | 9 | 578 | 10 | 595 | 10 | 626 | 10 | 641 | 10 | ||||||||||||||||||||||||||||||
Mixed use/other |
282 | 5 | 277 | 5 | 281 | 5 | 302 | 5 | 304 | 5 | ||||||||||||||||||||||||||||||
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Subtotal |
5,912 | 100 | % | 5,903 | 100 | % | 5,918 | 100 | % | 6,076 | 100 | % | 6,140 | 100 | % | |||||||||||||||||||||||||
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Allowance for losses |
(42 | ) | (44 | ) | (46 | ) | (49 | ) | (51 | ) | ||||||||||||||||||||||||||||||
Unamortized fees and costs |
2 | 2 | 3 | 3 | 3 | |||||||||||||||||||||||||||||||||||
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Total |
$ | 5,872 | $ | 5,861 | $ | 5,875 | $ | 6,030 | $ | 6,092 | ||||||||||||||||||||||||||||||
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Allowance for Losses on Commercial Mortgage Loans |
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Beginning balance |
$ | 44 | $ | 46 | $ | 49 | $ | 51 | $ | 54 | ||||||||||||||||||||||||||||||
Provision |
| 1 | | | | |||||||||||||||||||||||||||||||||||
Release |
(2 | ) | (3 | ) | (3 | ) | (2 | ) | (3 | ) | ||||||||||||||||||||||||||||||
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Ending balance |
$ | 42 | $ | 44 | $ | 46 | $ | 49 | $ | 51 | ||||||||||||||||||||||||||||||
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69
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Commercial Mortgage Loans Summary
(amounts in millions)
December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||||||||
Loan Size |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
||||||||||||||||||||||||||||||
Under $5 million |
$ | 2,458 | 42 | % | $ | 2,722 | 46 | % | $ | 2,583 | 44 | % | $ | 2,655 | 44 | % | $ | 2,698 | 44 | % | ||||||||||||||||||||
$5 million but less than $10 million |
1,508 | 25 | 1,521 | 26 | 1,512 | 25 | 1,540 | 25 | 1,540 | 25 | ||||||||||||||||||||||||||||||
$10 million but less than $20 million |
1,162 | 20 | 1,058 | 18 | 1,063 | 18 | 1,117 | 18 | 1,161 | 19 | ||||||||||||||||||||||||||||||
$20 million but less than $30 million |
267 | 4 | 198 | 3 | 247 | 4 | 249 | 4 | 225 | 4 | ||||||||||||||||||||||||||||||
$30 million and over |
517 | 9 | 404 | 7 | 513 | 9 | 515 | 9 | 516 | 8 | ||||||||||||||||||||||||||||||
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Total |
$ | 5,912 | 100 | % | $ | 5,903 | 100 | % | $ | 5,918 | 100 | % | $ | 6,076 | 100 | % | $ | 6,140 | 100 | % | ||||||||||||||||||||
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Commercial Mortgage Loan Information by Vintage as of December 31, 2012
(loan amounts in millions)
Loan Year |
Total Recorded Investment(1) |
Number of Loans |
Average Balance Per Loan |
Loan-To-Value(2) | Delinquent Principal Balance |
Number of Delinquent Loans |
Average Balance Per Delinquent Loan |
|||||||||||||||||||||
2004 and prior |
$ | 1,285 | 614 | $ | 2 | 47 | % | $ | 6 | 2 | $ | 3 | ||||||||||||||||
2005 |
1,185 | 282 | $ | 4 | 59 | % | | | $ | | ||||||||||||||||||
2006 |
1,129 | 261 | $ | 4 | 67 | % | | | $ | | ||||||||||||||||||
2007 |
986 | 164 | $ | 6 | 75 | % | 66 | 1 | $ | 66 | ||||||||||||||||||
2008 |
260 | 56 | $ | 5 | 71 | % | 3 | 1 | $ | 3 | ||||||||||||||||||
2009 |
| | $ | | | % | | | $ | | ||||||||||||||||||
2010 |
98 | 17 | $ | 6 | 58 | % | | | $ | | ||||||||||||||||||
2011 |
281 | 54 | $ | 5 | 63 | % | | | $ | | ||||||||||||||||||
2012 |
688 | 97 | $ | 7 | 66 | % | | | $ | | ||||||||||||||||||
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Total |
$ | 5,912 | 1,545 | $ | 4 | 62 | % | $ | 75 | 4 | $ | 19 | ||||||||||||||||
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(1) | Total recorded investment reflects the balance sheet carrying value gross of related allowance and the unamortized balance of loan origination fees and costs. |
(2) | Represents weighted-average loan-to-value as of December 31, 2012. |
70
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
General Account GAAP Net Investment Income Yields
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
GAAP Net Investment Income |
||||||||||||||||||||||||||||||||||||||||
Fixed maturity securitiestaxable |
$ | 678 | $ | 659 | $ | 669 | $ | 660 | $ | 2,666 | $ | 665 | $ | 669 | $ | 693 | $ | 670 | $ | 2,697 | ||||||||||||||||||||
Fixed maturity securitiesnon-taxable |
2 | 2 | 3 | 4 | 11 | 6 | 8 | 10 | 11 | 35 | ||||||||||||||||||||||||||||||
Commercial mortgage loans |
84 | 87 | 85 | 84 | 340 | 92 | 89 | 92 | 92 | 365 | ||||||||||||||||||||||||||||||
Restricted commercial mortgage loans related to securitization entities |
8 | 8 | 7 | 9 | 32 | 10 | 11 | 9 | 10 | 40 | ||||||||||||||||||||||||||||||
Equity securities |
5 | 4 | 6 | 4 | 19 | 3 | 3 | 10 | 3 | 19 | ||||||||||||||||||||||||||||||
Other invested assets |
37 | 46 | 36 | 43 | 162 | 36 | 31 | 38 | 30 | 135 | ||||||||||||||||||||||||||||||
Limited partnerships |
12 | 2 | 20 | 10 | 44 | (5 | ) | 11 | 17 | 4 | 27 | |||||||||||||||||||||||||||||
Restricted other invested assets related to securitization entities |
1 | | | | 1 | | | | | | ||||||||||||||||||||||||||||||
Policy loans |
30 | 31 | 31 | 31 | 123 | 31 | 30 | 30 | 29 | 120 | ||||||||||||||||||||||||||||||
Cash, cash equivalents and short-term investments |
7 | 8 | 10 | 10 | 35 | 13 | 12 | 6 | 6 | 37 | ||||||||||||||||||||||||||||||
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Gross investment income before expenses and fees |
864 | 847 | 867 | 855 | 3,433 | 851 | 864 | 905 | 855 | 3,475 | ||||||||||||||||||||||||||||||
Expenses and fees |
(24 | ) | (22 | ) | (21 | ) | (23 | ) | (90 | ) | (24 | ) | (22 | ) | (24 | ) | (25 | ) | (95 | ) | ||||||||||||||||||||
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Net investment income |
$ | 840 | $ | 825 | $ | 846 | $ | 832 | $ | 3,343 | $ | 827 | $ | 842 | $ | 881 | $ | 830 | $ | 3,380 | ||||||||||||||||||||
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Annualized Yields |
||||||||||||||||||||||||||||||||||||||||
Fixed maturity securitiestaxable |
4.9 | % | 4.8 | % | 4.9 | % | 4.9 | % | 4.8 | % | 4.9 | % | 5.0 | % | 5.2 | % | 5.0 | % | 5.0 | % | ||||||||||||||||||||
Fixed maturity securitiesnon-taxable |
2.5 | % | 2.4 | % | 3.3 | % | 3.4 | % | 2.9 | % | 3.6 | % | 3.8 | % | 4.1 | % | 4.2 | % | 4.0 | % | ||||||||||||||||||||
Commercial mortgage loans |
5.7 | % | 5.9 | % | 5.7 | % | 5.5 | % | 5.7 | % | 6.0 | % | 5.6 | % | 5.6 | % | 5.5 | % | 5.7 | % | ||||||||||||||||||||
Restricted commercial mortgage loans related to securitization entities |
9.1 | % | 8.6 | % | 7.6 | % | 9.0 | % | 8.5 | % | 9.5 | % | 10.1 | % | 7.8 | % | 7.6 | % | 8.8 | % | ||||||||||||||||||||
Equity securities |
4.1 | % | 3.5 | % | 5.7 | % | 4.1 | % | 4.4 | % | 3.4 | % | 3.4 | % | 11.7 | % | 3.2 | % | 5.4 | % | ||||||||||||||||||||
Other invested assets |
18.3 | % | 19.8 | % | 13.9 | % | 15.8 | % | 17.0 | % | 14.3 | % | 13.4 | % | 15.8 | % | 11.7 | % | 13.6 | % | ||||||||||||||||||||
Limited partnerships(1) |
14.0 | % | 2.3 | % | 22.6 | % | 11.5 | % | 12.7 | % | -5.7 | % | 12.6 | % | 19.9 | % | 5.1 | % | 7.8 | % | ||||||||||||||||||||
Restricted other invested assets related to securitization entities |
1.1 | % | 0.2 | % | 0.1 | % | | % | 0.3 | % | | % | 0.2 | % | 0.2 | % | 0.3 | % | | % | ||||||||||||||||||||
Policy loans |
7.4 | % | 7.6 | % | 7.8 | % | 8.0 | % | 7.7 | % | 8.0 | % | 7.7 | % | 7.9 | % | 8.0 | % | 7.9 | % | ||||||||||||||||||||
Cash, cash equivalents and short-term investments |
0.7 | % | 0.8 | % | 0.9 | % | 0.8 | % | 0.8 | % | 1.2 | % | 1.4 | % | 0.7 | % | 0.7 | % | 1.0 | % | ||||||||||||||||||||
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Gross investment income before expenses and fees |
4.9 | % | 4.9 | % | 5.0 | % | 4.9 | % | 4.9 | % | 4.9 | % | 5.0 | % | 5.3 | % | 5.0 | % | 5.0 | % | ||||||||||||||||||||
Expenses and fees |
-0.1 | % | -0.2 | % | -0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | -0.2 | % | -0.2 | % | -0.1 | % | ||||||||||||||||||||
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Net investment income |
4.8 | % | 4.7 | % | 4.9 | % | 4.8 | % | 4.8 | % | 4.8 | % | 4.9 | % | 5.1 | % | 4.8 | % | 4.9 | % | ||||||||||||||||||||
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Yields for fixed maturity securities and equity securities are based on amortized cost and cost, respectively. Yields for securities lending activity, which is included in other invested assets, are calculated net of the corresponding securities lending liability.
(1) | Limited partnership investments are equity-based and do not have fixed returns by period. |
71
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Net Investment Gains (Losses), Net of Taxes and Other AdjustmentsDetail
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
Net realized gains (losses) on available-for-sale securities: |
||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: |
||||||||||||||||||||||||||||||||||||||||
U.S. corporate |
$ | 9 | $ | 5 | $ | (1 | ) | $ | 8 | $ | 21 | $ | 15 | $ | 4 | $ | 1 | $ | (3 | ) | $ | 17 | ||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises |
1 | 2 | 2 | 2 | 7 | 5 | 1 | | 3 | 9 | ||||||||||||||||||||||||||||||
Foreign corporate |
3 | 1 | 1 | 1 | 6 | (3 | ) | 17 | (8 | ) | (1 | ) | 5 | |||||||||||||||||||||||||||
Foreign government |
3 | 2 | 2 | 1 | 8 | 1 | 3 | 2 | | 6 | ||||||||||||||||||||||||||||||
Tax-exempt |
| (1 | ) | 1 | (1 | ) | (1 | ) | 7 | 1 | (1 | ) | | 7 | ||||||||||||||||||||||||||
Mortgage-backed securities |
(5 | ) | (1 | ) | (2 | ) | (2 | ) | (10 | ) | (8 | ) | (2 | ) | (1 | ) | (2 | ) | (13 | ) | ||||||||||||||||||||
Asset-backed securities |
(14 | ) | (1 | ) | | 1 | (14 | ) | (1 | ) | | (1 | ) | | (2 | ) | ||||||||||||||||||||||||
Equity securities |
| 3 | | | 3 | 2 | | 1 | 2 | 5 | ||||||||||||||||||||||||||||||
Foreign exchange |
| | | | | (1 | ) | (1 | ) | 1 | | (1 | ) | |||||||||||||||||||||||||||
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Total net realized gains (losses) on available-for-sale securities |
(3 | ) | 10 | 3 | 10 | 20 | 17 | 23 | (6 | ) | (1 | ) | 33 | |||||||||||||||||||||||||||
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Impairments: |
||||||||||||||||||||||||||||||||||||||||
Sub-prime residential mortgage-backed securities |
(6 | ) | (8 | ) | (2 | ) | (2 | ) | (18 | ) | (2 | ) | (1 | ) | (3 | ) | (6 | ) | (12 | ) | ||||||||||||||||||||
Alt-A residential mortgage-backed securities |
(1 | ) | (4 | ) | (7 | ) | (3 | ) | (15 | ) | (3 | ) | (2 | ) | (2 | ) | (4 | ) | (11 | ) | ||||||||||||||||||||
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Total sub-prime and Alt-A residential mortgage-backed securities |
(7 | ) | (12 | ) | (9 | ) | (5 | ) | (33 | ) | (5 | ) | (3 | ) | (5 | ) | (10 | ) | (23 | ) | ||||||||||||||||||||
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Prime residential mortgage-backed securities |
| (1 | ) | (3 | ) | | (4 | ) | (1 | ) | (3 | ) | (2 | ) | (3 | ) | (9 | ) | ||||||||||||||||||||||
Other mortgage-backed securities |
(1 | ) | (1 | ) | (1 | ) | (1 | ) | (4 | ) | (3 | ) | | | | (3 | ) | |||||||||||||||||||||||
Commercial mortgage-backed securities |
(3 | ) | (3 | ) | (3 | ) | (3 | ) | (12 | ) | (3 | ) | (1 | ) | (4 | ) | | (8 | ) | |||||||||||||||||||||
Corporate fixed maturity securities |
(3 | ) | | (10 | ) | | (13 | ) | | (27 | ) | | (9 | ) | (36 | ) | ||||||||||||||||||||||||
Limited partnerships |
| | (1 | ) | | (1 | ) | | | (1 | ) | | (1 | ) | ||||||||||||||||||||||||||
Commercial mortgage loans |
| (2 | ) | | (1 | ) | (3 | ) | | | (4 | ) | (1 | ) | (5 | ) | ||||||||||||||||||||||||
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Total impairments |
(14 | ) | (19 | ) | (27 | ) | (10 | ) | (70 | ) | (12 | ) | (34 | ) | (16 | ) | (23 | ) | (85 | ) | ||||||||||||||||||||
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Net unrealized gains (losses) on trading securities |
| 9 | 22 | (17 | ) | 14 | (6 | ) | 7 | 9 | 7 | 17 | ||||||||||||||||||||||||||||
Derivative instruments |
6 | (2 | ) | (18 | ) | 17 | 3 | 2 | (50 | ) | (10 | ) | (6 | ) | (64 | ) | ||||||||||||||||||||||||
Commercial mortgage loans held-for-sale market valuation allowance |
(2 | ) | 1 | 1 | 2 | 2 | 2 | 2 | 1 | (1 | ) | 4 | ||||||||||||||||||||||||||||
Contingent purchase price valuation change |
| (5 | ) | | (1 | ) | (6 | ) | (1 | ) | (15 | ) | (1 | ) | | (17 | ) | |||||||||||||||||||||||
Net gains (losses) related to securitization entities |
21 | 12 | (3 | ) | 22 | 52 | 3 | (37 | ) | (3 | ) | 6 | (31 | ) | ||||||||||||||||||||||||||
Other |
| | | | | (1 | ) | 1 | | | | |||||||||||||||||||||||||||||
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Net investment gains (losses), net of taxes |
8 | 6 | (22 | ) | 23 | 15 | 4 | (103 | ) | (26 | ) | (18 | ) | (143 | ) | |||||||||||||||||||||||||
Adjustment for DAC and other intangible amortization and certain benefit reserves, net of taxes |
(7 | ) | (6 | ) | 3 | (5 | ) | (15 | ) | (3 | ) | 26 | 3 | 3 | 29 | |||||||||||||||||||||||||
Adjustment for net investment (gains) losses attributable to noncontrolling interests, net of taxes |
| (1 | ) | | (2 | ) | (3 | ) | | (1 | ) | | (1 | ) | (2 | ) | ||||||||||||||||||||||||
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Net investment gains (losses), net of taxes and other adjustments |
$ | 1 | $ | (1 | ) | $ | (19 | ) | $ | 16 | $ | (3 | ) | $ | 1 | $ | (78 | ) | $ | (23 | ) | $ | (16 | ) | $ | (116 | ) | |||||||||||||
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72
Reconciliations of Non-GAAP Measures
73
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Reconciliation of Operating ROE
(amounts in millions)
Twelve Month Rolling Average ROE |
Twelve months ended | |||||||||||||||||||
December 31, 2012 |
September 30, 2012 |
June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
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GAAP Basis ROE |
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Net income (loss) available to Genworth Financial, Inc.s common stockholders for the twelve months ended(1) |
$ | 323 | $ | 299 | $ | 249 | $ | 37 | $ | 49 | ||||||||||
Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss)(2) |
$ | 11,161 | $ | 11,069 | $ | 11,004 | $ | 10,973 | $ | 10,945 | ||||||||||
GAAP Basis ROE (1) divided by (2) |
2.9 | % | 2.7 | % | 2.3 | % | 0.3 | % | 0.4 | % | ||||||||||
Operating ROE |
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Net operating income (loss) for the twelve months ended(1) |
$ | 399 | $ | 356 | $ | 297 | $ | 104 | $ | 148 | ||||||||||
Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss)(2) |
$ | 11,161 | $ | 11,069 | $ | 11,004 | $ | 10,973 | $ | 10,945 | ||||||||||
Operating ROE (1) divided by (2) |
3.6 | % | 3.2 | % | 2.7 | % | 0.9 | % | 1.4 | % | ||||||||||
Quarterly Average ROE |
Three months ended | |||||||||||||||||||
December 31, 2012 |
September 30, 2012 |
June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
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GAAP Basis ROE |
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Net income (loss) available to Genworth Financial, Inc.s common stockholders for the period ended(3) |
$ | 166 | $ | 34 | $ | 76 | $ | 47 | $ | 142 | ||||||||||
Average Genworth Financial, Inc.s stockholders equity for the period, excluding accumulated other comprehensive income (loss)(4) |
$ | 11,270 | $ | 11,184 | $ | 11,123 | $ | 11,052 | $ | 10,947 | ||||||||||
Annualized GAAP Quarterly Basis ROE (3) divided by (4) |
5.9 | % | 1.2 | % | 2.7 | % | 1.7 | % | 5.2 | % | ||||||||||
Operating ROE |
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Net operating income (loss) for the period ended(3) |
$ | 167 | $ | 121 | $ | 80 | $ | 31 | $ | 124 | ||||||||||
Quarterly average Genworth Financial, Inc.s stockholders equity for the period, excluding accumulated other comprehensive income (loss)(4) |
$ | 11,270 | $ | 11,184 | $ | 11,123 | $ | 11,052 | $ | 10,947 | ||||||||||
Annualized Operating Quarterly Basis ROE (3) divided by (4) |
5.9 | % | 4.3 | % | 2.9 | % | 1.1 | % | 4.5 | % |
Non-GAAP Definition for Operating ROE
The company references the non-GAAP financial measure entitled operating return on equity or operating ROE. The company defines operating ROE as net operating income (loss) divided by average ending Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss) in average ending Genworth Financial, Inc.s stockholders equity. Management believes that analysis of operating ROE enhances understanding of the efficiency with which the company deploys its capital. However, operating ROE as defined by the company should not be viewed as a substitute for GAAP net income (loss) available to Genworth Financial, Inc.s common stockholders divided by average ending Genworth Financial, Inc.s stockholders equity.
(1) | The twelve months ended information is derived by adding the four quarters of net income (loss) available to Genworth Financial, Inc.s common stockholders and net operating income (loss) from page 10 herein. |
(2) | Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss), is derived by averaging ending Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss) for the most recent five quarters. |
(3) | Net income (loss) available to Genworth Financial, Inc.s common stockholders and net operating income (loss) from page 10 herein. |
(4) | Quarterly average Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss), is derived by averaging ending Genworth Financial, Inc.s stockholders equity, excluding accumulated other comprehensive income (loss). |
74
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Reconciliation of Expense Ratio
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
GAAP Basis Expense Ratio |
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Acquisition and operating expenses, net of deferrals(1) |
$ | 330 | $ | 504 | $ | 502 | $ | 530 | $ | 1,866 | $ | 569 | $ | 581 | $ | 581 | $ | 563 | $ | 2,294 | ||||||||||||||||||||
Total revenues(2) |
$ | 2,538 | $ | 2,536 | $ | 2,523 | $ | 2,426 | $ | 10,023 | $ | 2,624 | $ | 2,521 | $ | 2,655 | $ | 2,568 | $ | 10,368 | ||||||||||||||||||||
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Expense ratio (1) divided by (2) |
13.0 | % | 19.9 | % | 19.9 | % | 21.8 | % | 18.6 | % | 21.7 | % | 23.0 | % | 21.9 | % | 21.9 | % | 22.1 | % | ||||||||||||||||||||
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GAAP Basis, As AdjustedExpense Ratio |
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Acquisition and operating expenses, net of deferrals |
$ | 330 | $ | 504 | $ | 502 | $ | 530 | $ | 1,866 | $ | 569 | $ | 581 | $ | 581 | $ | 563 | $ | 2,294 | ||||||||||||||||||||
Less lifestyle protection insurance business |
113 | 117 | 126 | 127 | 483 | 139 | 143 | 156 | 152 | 590 | ||||||||||||||||||||||||||||||
Less wealth management business |
59 | 63 | 64 | 92 | 278 | 93 | 95 | 92 | 92 | 372 | ||||||||||||||||||||||||||||||
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Adjusted acquisition and operating expenses, net of deferrals(3) |
$ | 158 | $ | 324 | $ | 312 | $ | 311 | $ | 1,105 | $ | 337 | $ | 343 | $ | 333 | $ | 319 | $ | 1,332 | ||||||||||||||||||||
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Total revenues |
$ | 2,538 | $ | 2,536 | $ | 2,523 | $ | 2,426 | $ | 10,023 | $ | 2,624 | $ | 2,521 | $ | 2,655 | $ | 2,568 | $ | 10,368 | ||||||||||||||||||||
Less lifestyle protection insurance business |
195 | 198 | 211 | 218 | 822 | 226 | 245 | 281 | 270 | 1,022 | ||||||||||||||||||||||||||||||
Less wealth management business |
74 | 82 | 122 | 112 | 390 | 114 | 115 | 114 | 110 | 453 | ||||||||||||||||||||||||||||||
Less net investment gains (losses) |
10 | 8 | (35 | ) | 34 | 17 | 7 | (155 | ) | (41 | ) | (30 | ) | (219 | ) | |||||||||||||||||||||||||
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Adjusted total revenues(4) |
$ | 2,259 | $ | 2,248 | $ | 2,225 | $ | 2,062 | $ | 8,794 | $ | 2,277 | $ | 2,316 | $ | 2,301 | $ | 2,218 | $ | 9,112 | ||||||||||||||||||||
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Adjusted expense ratio (3) divided by (4) |
7.0 | % | 14.4 | % | 14.0 | % | 15.1 | % | 12.6 | % | 14.8 | % | 14.8 | % | 14.5 | % | 14.4 | % | 14.6 | % | ||||||||||||||||||||
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Non-GAAP Definition for Expense Ratio
The company references the non-GAAP financial measure entitled expense ratio as a measure of productivity. The company defines expense ratio as acquisition and operating expenses, net of deferrals, divided by total revenues, excluding the effects of the companys lifestyle protection insurance and wealth management businesses. The lifestyle protection insurance and wealth management businesses are excluded from this ratio as their expense bases are comprised of varying levels of non-deferrable acquisition costs. Management believes that the expense ratio analysis enhances understanding of the productivity of the company. However, the expense ratio as defined by the company should not be viewed as a substitute for GAAP acquisition and operating expenses, net of deferrals, divided by total revenues.
75
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Reconciliation of Core Premiums
(amounts in millions)
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | |||||||||||||||||||||||||||||||
Reported premiums |
$ | 1,318 | $ | 1,311 | $ | 1,302 | $ | 1,107 | $ | 5,038 | $ | 1,352 | $ | 1,461 | $ | 1,455 | $ | 1,437 | $ | 5,705 | ||||||||||||||||||||
Less U.S. Life Insurancefixed annuities premiums |
30 | 26 | 15 | 33 | 104 | 33 | 22 | 20 | 20 | 95 | ||||||||||||||||||||||||||||||
Less impact of changes in foreign exchange rates |
(2 | ) | (34 | ) | (23 | ) | (3 | ) | (62 | ) | 7 | 54 | 44 | 10 | 115 | |||||||||||||||||||||||||
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Core premiums |
$ | 1,290 | $ | 1,319 | $ | 1,310 | $ | 1,077 | $ | 4,996 | $ | 1,312 | $ | 1,385 | $ | 1,391 | $ | 1,407 | $ | 5,495 | ||||||||||||||||||||
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Reported premium percentage change from prior year |
-2.5 | % | -10.3 | % | -10.5 | % | -23.0 | % | -11.7 | % | -7.8 | % | 1.0 | % | -1.0 | % | -2.2 | % | -2.5 | % | ||||||||||||||||||||
Core premium percentage change from prior year |
-1.7 | % | -4.8 | % | -5.8 | % | -23.5 | % | -9.1 | % | -8.2 | % | -2.2 | % | -1.6 | % | 3.0 | % | -2.3 | % |
Non-GAAP Definition for Core Premiums
The company references the non-GAAP financial measure entitled core premiums as a measure of premium growth. The company defines core premiums as earned premiums less premiums from the U.S. Life Insurancefixed annuities business and the impact of changes in foreign exchange rates. The fixed annuities premiums are excluded in this measure primarily because these are single premiums and are not an indication of future premiums. The impact of changes in foreign exchange rates are excluded in this measure to present periods on a comparable exchange rate. Management believes that analysis of core premiums enhances understanding of premium growth of the company. However, core premiums as defined by the company should not be viewed as a substitute for GAAP earned premiums.
76
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||||
(Assetsamounts in billions) | 4Q | 3Q | 2Q | 1Q | Total | 4Q | 3Q | 2Q | 1Q | Total | ||||||||||||||||||||||||||||||||
ReportedTotal Invested Assets and Cash |
$ | 78.0 | $ | 78.6 | $ | 76.9 | $ | 74.5 | $ | 78.0 | $ | 76.4 | $ | 76.1 | $ | 71.5 | $ | 71.8 | $ | 76.4 | ||||||||||||||||||||||
Subtract: |
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Securities lending |
0.2 | 0.2 | 0.2 | 0.1 | 0.2 | 0.4 | 0.2 | 0.6 | 0.8 | 0.4 | ||||||||||||||||||||||||||||||||
Unrealized gains (losses) |
7.2 | 7.3 | 6.4 | 4.1 | 7.2 | 5.0 | 5.7 | 1.7 | 1.2 | 5.0 | ||||||||||||||||||||||||||||||||
Derivative counterparty collateral |
0.8 | 1.0 | 1.2 | 0.6 | 0.8 | 1.0 | 1.7 | 0.7 | 0.7 | 1.0 | ||||||||||||||||||||||||||||||||
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Adjusted end of period invested assets |
$ | 69.8 | $ | 70.1 | $ | 69.1 | $ | 69.7 | $ | 69.8 | $ | 70.0 | $ | 68.5 | $ | 68.5 | $ | 69.1 | $ | 70.0 | ||||||||||||||||||||||
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(A) |
Average Invested Assets Used in Reported Yield Calculation |
$ | 70.0 | $ | 69.6 | $ | 69.4 | $ | 69.9 | $ | 69.7 | $ | 69.2 | $ | 68.5 | $ | 68.8 | $ | 68.9 | $ | 68.9 | |||||||||||||||||||||
Subtract: |
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Restricted commercial mortgage loans and other invested assets related to securitization entities |
0.3 | 0.4 | 0.3 | 0.4 | 0.4 | 0.4 | 0.4 | 0.5 | 0.5 | 0.5 | ||||||||||||||||||||||||||||||||
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(B) |
Average Invested Assets Used in Core Yield Calculation |
69.7 | 69.2 | 69.1 | 69.5 | 69.3 | 68.8 | 68.1 | 68.3 | 68.4 | 68.4 | |||||||||||||||||||||||||||||||
Subtract: |
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Portfolios supporting floating products and non-recourse funding obligations(1) |
6.2 | 6.6 | 6.8 | 7.5 | 6.8 | 7.9 | 8.1 | 8.3 | 8.6 | 8.2 | ||||||||||||||||||||||||||||||||
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(C) |
Average Invested Assets Used in Core Yield (excl. Floating and Non-Recourse Funding) Calculation |
$ | 63.5 | $ | 62.6 | $ | 62.3 | $ | 62.0 | $ | 62.5 | $ | 60.9 | $ | 60.0 | $ | 60.0 | $ | 59.8 | $ | 60.2 | |||||||||||||||||||||
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(Incomeamounts in millions) |
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(D) |
ReportedNet Investment Income |
$ | 840 | $ | 825 | $ | 846 | $ | 832 | $ | 3,343 | $ | 827 | $ | 842 | $ | 881 | $ | 830 | $ | 3,380 | |||||||||||||||||||||
Subtract: |
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Bond calls and commercial mortgage loan prepayments |
13 | 14 | 4 | 5 | 36 | 10 | 8 | 16 | 8 | 42 | ||||||||||||||||||||||||||||||||
Reinsurance(2) |
16 | 19 | 24 | 22 | 81 | 19 | 21 | 36 | 32 | 108 | ||||||||||||||||||||||||||||||||
Other non-core items(3) |
13 | 3 | 8 | 4 | 28 | 7 | 3 | 15 | 2 | 27 | ||||||||||||||||||||||||||||||||
Restricted commercial mortgage loans and other invested assets related to securitization entities |
5 | 6 | 5 | 5 | 21 | 6 | 8 | 5 | 7 | 26 | ||||||||||||||||||||||||||||||||
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(E) |
Core Net Investment Income |
793 | 783 | 805 | 796 | 3,177 | 785 | 802 | 809 | 781 | 3,177 | |||||||||||||||||||||||||||||||
Subtract: |
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Investment income from portfolios supporting floating products and non-recourse funding obligations(1) |
31 | 29 | 30 | 33 | 123 | 35 | 33 | 37 | 34 | 139 | ||||||||||||||||||||||||||||||||
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(F) |
Core Net Investment Income (excl. Floating and Non-Recourse Funding) |
$ | 762 | $ | 754 | $ | 775 | $ | 763 | $ | 3,054 | $ | 750 | $ | 769 | $ | 772 | $ | 747 | $ | 3,038 | |||||||||||||||||||||
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(D) / (A) |
Reported Yield |
4.80 | % | 4.74 | % | 4.88 | % | 4.76 | % | 4.80 | % | 4.78 | % | 4.92 | % | 5.12 | % | 4.82 | % | 4.91 | % | |||||||||||||||||||||
(E) / (B) |
Core Yield |
4.55 | % | 4.53 | % | 4.66 | % | 4.58 | % | 4.58 | % | 4.56 | % | 4.71 | % | 4.74 | % | 4.57 | % | 4.65 | % | |||||||||||||||||||||
(F) / (C) |
Core Yield (excl. Floating and Non-Recourse Funding) |
4.80 | % | 4.82 | % | 4.98 | % | 4.92 | % | 4.88 | % | 4.93 | % | 5.13 | % | 5.15 | % | 5.00 | % | 5.05 | % |
Notes: | Columns may not add due to rounding. |
Yields have been annualized. |
Non-GAAP Definition for Core Yield
The company references the non-GAAP financial measure entitled core yield as a measure of investment yield. The company defines core yield as the investment yield adjusted for those items that are not recurring in nature. Management believes that analysis of core yield enhances understanding of the investment yield of the company. However, core yield as defined by the company should not be viewed as a substitute for GAAP investment yield.
(1) | Floating products refer to institutional products and the non-recourse funding obligations that support certain term and universal life insurance reserves in the companys life insurance business. |
(2) | Represents imputed investment income related to reinsurance agreements in the lifestyle protection insurance business. |
(3) | Includes mark-to-market adjustment on assets supporting executive deferred compensation and various other immaterial items. |
77
78
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
The companys principal life insurance subsidiaries are rated in terms of financial strength by Standard & Poors Financial Services LLC (S&P), Moodys Investors Service, Inc. (Moodys) and A.M. Best Company, Inc. (A.M. Best) as follows:
Company |
S&P |
Moodys |
A.M. Best | |||
Genworth Life Insurance Company |
A- | A3 | A | |||
Genworth Life Insurance Company (short-term rating) |
A2 | P-1 | Not rated | |||
Genworth Life and Annuity Insurance Company |
A- | A3 | A | |||
Genworth Life and Annuity Insurance Company (short-term rating) |
A2 | P-1 | Not rated | |||
Genworth Life Insurance Company of New York |
A- | A3 | A |
The companys principal lifestyle protection insurance subsidiaries are rated in terms of financial strength by S&P as follows:
Company |
S&P |
|||||
Financial Assurance Company Limited |
A- | |||||
Financial Insurance Company Limited |
A- |
The companys principal mortgage insurance subsidiaries are rated in terms of financial strength by S&P and Moodys as follows:
Company |
S&P |
Moodys |
||||
Genworth Mortgage Insurance Corporation |
B | Ba2 | ||||
Genworth Residential Mortgage Insurance Corporation of NC |
B | Ba2 | ||||
Genworth Financial Mortgage Insurance Pty. Limited (Australia) |
AA- | A3 | ||||
Genworth Financial Mortgage Insurance Limited (Europe) |
BBB- | Not rated | ||||
Genworth Financial Mortgage Insurance Company Canada(1) |
AA- | Not rated | ||||
Genworth Seguros de Credito a la Vivienda S.A. de C.V.(2) |
mxAA- | Aa3.mx |
(1) | Genworth Financial Mortgage Insurance Company Canada is also rated AA by Dominion Bond Rating Service (DBRS). |
(2) | Genworth Seguros de Credito a la Vivienda S.A. de C.V. is also rated BB+ by S&P and Baa3 by Moodys on a Global Scale Insurance financial strength basis. |
The S&P, Moodys, A.M. Best and DBRS ratings included are not designed to be, and do not serve as, measures of protection or valuation offered to investors. These financial strength ratings should not be relied on with respect to making an investment in the companys securities.
79
GENWORTH FINANCIAL, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2012
Financial Strength Ratings (continued)
S&P states that an insurer rated AA (Very Strong) has very strong financial security characteristics that outweigh any vulnerabilities, and is highly likely to have the ability to meet financial commitments. Insurers rated AA (Very Strong), A (Strong), BBB (Good) or B (Weak) have very strong, strong, good, or weak financial security characteristics, respectively. The AA, A, BBB and B ranges are the second-, third-, fourth- and sixth-highest of nine financial strength rating ranges assigned by S&P, which range from AAA to R. A plus (+) or minus (-) shows relative standing in a rating category. These suffixes are not added to ratings in the AAA category or to ratings below the CCC category. Accordingly, the AA-, A-, BBB- and B ratings are the fourth-, seventh-, tenth- and fifteenth-highest of S&Ps 21 ratings categories. The short-term A-2 rating is the second highest rating and shows the capacity to meet financial commitments is satisfactory. An obligor rated mxAA has a very strong capacity to meet its financial commitments relative to that of other Mexican obligors. The mxAA rating is the second-highest enterprise credit rating assigned on S&Ps CaVal national scale.
Moodys states that insurance companies rated A (Good) offer good financial security and those rated Ba (Questionable) offer questionable financial security. The A (Good) and Ba (Questionable) ranges are the third- and fifth-highest, respectively, of nine financial strength rating ranges assigned by Moodys, which range from Aaa to C. Numeric modifiers are used to refer to the ranking within the group, with 1 being the highest and 3 being the lowest. These modifiers are not added to ratings in the Aaa category or to ratings below the Caa category. Accordingly, the A3 and Ba2 ratings are the seventh- and twelfth-highest, respectively, of Moodys 21 ratings categories. The short-term rating P-1 is the highest rating and shows superior ability for repayment of short-term debt obligations. Issuers or issues rated Aa.mx demonstrate very strong creditworthiness relative to other issuers in Mexico.
A.M. Best states that the A (Excellent) rating is assigned to those companies that have, in its opinion, an excellent ability to meet their ongoing insurance obligations. The A (Excellent) rating is the third-highest, of 15 ratings assigned by A.M. Best, which range from A++ to F.
DBRS states that long-term obligations rated AA are of superior credit quality. The capacity for the payment of financial obligations is considered high and unlikely to be significantly variable to future events. Credit quality differs from AAA only to a small degree.
S&P, Moodys, A.M. Best and DBRS review their ratings periodically and the company cannot assure you that it will maintain the current ratings in the future. Other agencies may also rate the company or its insurance subsidiaries on a solicited or an unsolicited basis.
About Genworth Financial
Genworth is a leading financial security company meeting the retirement, longevity and lifestyle protection, investment and mortgage insurance needs of more than 15 million customers, with a presence in more than 25 countries. For more information, visit www.genworth.com.
Inquiries:
Georgette Nicholas, 804-662-2248
Georgette.Nicholas@genworth.com
80
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